The most important thing is to know the risks you are taking. The most common mistake that small businesses make, particularly during startup, is to carry inadequate liability coverage, which insures against bodily injury or property damage to others, Fairbrother says. It's a misconception to believe that because your business has little revenue or assets, that a judgment won't hurt you. If you are covered by liability insurance, the insurance company represents you in court, so in a way, you are also buying legal representation. Common types of insurance coverage frequently purchased by small business owners include property insurance, liability insurance, and, if you employ others, workman's compensation insurance.
Property insurance covers the building or buildings and contents of the business.
Outdoor signs, crime coverage, property of others, glass coverage, etc., can be covered as well, depending on the needs of your business. Liability coverage covers sums you could be obligated to pay due to bodily injury or property damage to others. If you do not own your building, your landlord normally would need to be added as an additional insured on the policy in order to protect her. Liability covers the premises and operations of the insured, as well as her products and completed operations. Workman's compensation insurance protects your employees if they suffer job-related injuries.