There is only one kind of business insurance that’s required by law, and that’s worker’s compensation (only required if you have workers); all other forms are elective. That’s not a free pass to forgo purchasing business insurance though. Let’s face it; even if you don’t HAVE to get it, you still HAVE to get it, for the sake of your business anyway. Business insurance protects your company from unforeseen mishaps and gives you the peace of mind necessary to go about your daily business-building activities.

So how do you know what kinds of insurance to get, and how do you get them? You consult a knowledgeable business insurance broker/agent, that’s how. A good broker will be able to recommend exactly what kinds of insurance your business will need both now and in the future. Blindly meeting your broker without the slightest clue as to what you’re looking for, however, isn’t wise. So here’s the run down on business insurance.

Liability and property insurance are highly recommended for most small businesses. They come in various forms and can be tailored to different needs, but in their most basic forms they will protect your business from legal damages in the event of a lawsuit or property damages as a result of natural disasters and such. Another recommended type of insurance is key-person insurance, which is a policy taken out on the key person behind the business (usually the owner) in the event that he or she dies. This kind of insurance is good for small businesses that have one or a few key players that run the bulk of the business operations. All of these types of insurance are highly recommended, but if nothing else, at least consider liability insurance, it is the most necessary and important kind of business insurance you can get.

All other kinds of insurance are either nice-to-have add ons or are recommended only in certain circumstances. Officer and director insurance is nice because it will protect a business’s officers and directors from personal liability in the even of a lawsuit. Vehicle insurance will cover liabilities that have to do with any injuries that might have been caused by the use of a vehicle owned by the business.

Insurance for your employees is certainly not required, but a competitive health and medical insurance (as well as dental, vision and life insurance) package can attract quality employees and is worth considering.

If your business is home-based, then your homeowner’s insurance may already cover certain aspects of the business, but that’s not always the case. So talk this over in depth with your broker to make sure you’re actually getting what you need and not getting what you don’t.

The most important part of the insurance-purchasing process is finding a good broker whom you trust. This is just a basic overview of business insurance, and there are many different variables within the various forms of business insurance, so taking the time to find the right person is essential.

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