Assess Your Insurance Needs

It has been estimated that 80 percent of small businesses are not insured to the extent they should be. And many small businesses get blindsided because they don't read the fine print in their policies or fail to obtain the right type of insurance.

Almost every business needs a good insurance program to protect it against various perils and risks, and there are many different types of insurance that may be appropriate for your business.

Certain types of insurance are mandatory in various states, such as workers' compensation insurance and vehicle or automobile liability insurance. The particular type of insurance you need depends on the nature of your business. An engineering firm might need errors and omissions insurance, for example, while an Internet-based company may want to get Web site insurance.

Listed below are the most common types of insurance available for a small business. Check your existing coverage against the list to make sure you have everything you need to cover your company in case of an emergency:

Property Damage. Covers damage to your business property due to fire, wind, explosion, accidents, robbery or theft.

Liability. Covers liability for injury to people or property caused by your company or its employees.

Products Liability. Covers liability for injuries caused by your company's products.

Vehicle. Covers liability for injuries caused by company vehicles and employee vehicles when used for business purposes.

Business Interruption. Covers expenses incurred if the business is interrupted by fire or other natural events. The policy can cover costs such as salaries to employees, utilities and rent, as well as lost profits.

Key Man Life. A life insurance policy payable on the death of a key employee. Especially handy if your company is closely held by a few individuals. On the death of one of the founders, the proceeds from the policy can be used to buy out the deceased founder's share of the company.

Directors' and Officers' Liability. Indemnifies officers and directors of the company for expenses incurred as a result of acting on behalf of the company.

Health and Medical. Covers various health and medical needs for employees and their dependents.

Workers' Compensation. Covers injuries to employees for work-related matters.

Employment Practices Liability. Covers various lawsuits brought by employees, such as sexual harassment and wrongful termination.

Web Site. Covers various claims — loss of money, libel, copyright infringement and damages to computers and data as a result of vandalism and viruses — associated with your company's Web site.

Errors and Omissions. Covers claims for malpractice or errors and omissions in rendering services.

Crime Coverage. Covers the theft and disappearance of company assets.

Whatever kind of insurance you sign up for, be sure to ask about the scope of the coverage, exclusions from coverage and the policy's deductible. Insurance is worth nothing if it doesn't cover what you need when you need it.