Why you need it
A major fire at your worksite or even a minor fall by a visitor can have a devastating impact on your business. So how can you protect your small business from big financial losses? You can start with two critical kinds of commercial insurance that are often packaged together in a Business Owner's Policy (BOP): property insurance and liability insurance.

What Property Insurance Is
Property insurance covers your physical assets: your building, equipment, furnishings, fixtures, inventory, computers, valuable papers, records, and more. But property insurance can also provide income if your business is forced to suspend operations after a covered loss.

For example, if your building is destroyed or damaged in a fire, you may not only be covered for that property loss, you may also be able to collect income while you're regrouping.

What Liability Insurance Is
Business liability insurance is specifically designed to protect your business assets if your company is sued for something it did or even didn't do that resulted in bodily injury or property damage to someone else.
For example, a liability insurance policy may cover expenses if someone claims to be injured by a product you sell…or it can pay for defense costs if a competitor sues you for trademark infringement.

How Liability and Property Insurance Work
Many insurance providers bundle the primary property and liability insurance coverage you need into an economically priced business owner's policy. You can then tailor your insurance package by extending the coverage limits in specific areas or adding options to cover risks that are inherent to your industry.

Why You Need Commercial Auto Insurance
You wouldn't dream of driving your personal automobile without insurance. It's just as important to protect your company vehicles. Even if you have personal auto insurance, you still need commercial auto insurance. That's because vehicles involved in an accident while engaged in company business may not be covered by your personal insurance. To make matters worse, you could be charged with misrepresentation if you've placed a vehicle you use for commercial purposes under your personal auto policy.

What Commercial Auto Insurance Covers
There are a variety of coverage for your commercial autos, and your agent or broker can help you choose the right one. The discussion should include business-use autos, pickups, vans, trucks and non-owned and rented vehicles. You may also want to include a conversation about "non-owned" vehicles-when employees use their own vehicles to run errands; and rented vehicles-when an employee travels and needs to rent a car.

Why You Need Workers' Compensation Insurance
As soon as you hire your first employee, you need the protection of workers' compensation insurance. Not only do many state laws require it, but also the financial security of your business depends on it.

What Workers' Compensation Insurance Is
In general, workers' compensation represents a compromise between employers and employees regarding employment-related injuries or illnesses. In short, employees relinquish their right to sue employers if they suffer some job-related injury or illness. But in return, employers agree to provide state-mandated benefits if employees suffer some job-related injury or illness. And to ensure employees have the money to pay these mandated benefits, most states require that employers demonstrate that they have the financial ability to pay any claims that may arise. Typically this financial ability is demonstrated through the purchase of Workers' Compensation insurance. Laws regarding workers' compensation insurance vary by state, so check with your independent insurance agent or broker to find out exactly what you need and how it's purchased.

How Workers' Compensation Insurance Works
Most workers' compensation insurance policies actually provide two types of coverage:

Workers' Compensation Coverage. This type of insurance provides benefits for injured workers as required by state law regardless of who is at fault for the injury or illness. In other words, whatever benefits your state requires, your Workers' Compensation policy would provide.

Employers' Liability Coverage. This additional coverage protects employers in case they are ever sued for damages arising from employment-related accidents or diseases. However, to collect benefits provided by employer's liability coverage, both the employee as well as anyone else not covered by workers' compensation laws (i.e., spouses and dependents) would have to prove that the employer was actually legally responsible for the employee's injury or disease

Why You Need Errors & Omissions Insurance
Regardless of what kind of business you own, customers can claim that something you did on their behalf was done incorrectly, and that this error cost them money or caused them harm in some way.

What Errors & Omissions Insurance Is
In the litigious world we live in today, many business owners protect themselves with errors and omissions insurance (E&O). This type of insurance may be appropriate for anyone who gives advice, makes educated recommendations, designs solutions or represents the needs of others, such as teachers, consultants, software developers, ad copywriters, Web page designers, placement services, telecommunication carriers or inspectors.

How Errors & Omissions Insurance Works
Although formalizing a contract with your clients can help limit your liability, the big expense in an errors and omissions claim is the legal defense needed to prove liability or innocence. Errors & Omissions policies are designed to cover many of these defense costs and ultimately the final judgment if the business owner does not win the case.

Why You Need Umbrella Insurance
No one really expects a disaster to strike his or her business. But every small business is vulnerable to a major catastrophe or a huge lawsuit. Think about some of the devastating losses you've heard about recently. Or the large settlements that are awarded in courts these days. Some of these losses could exceed your primary insurance coverage…unless you protect your business with umbrella insurance.

What Umbrella Insurance Is
As its name implies, umbrella insurance extends your coverage beyond the limits of your basic business insurance. Umbrella insurance is important because it covers unsuspected events. It's not expensive and in certain instances, it could literally save your business.

How Umbrella Insurance Works
Umbrella insurance policies provide additional liability insurance coverage after the limits of your underlying policy are reached.

For example, if several people were injured on your property and required $1.5 million in medical treatment but the liability limit of your underlying policy is $1 million, your umbrella insurance policy would cover the additional $500,000 (if you're found liable).

Cost of Medical Treatment $1,500,000
Your Basic Liability Limit $1,000,000
Umbrella Policy Would Cover the Gap $500,000