Elective and Required Types of Small Business Insurance

Along with purchasing property insurance and liability insurance (including errors and omissions insurance (E&O), employment practices, product liability, and/or other forms of liability insurance), you will pay unemployment insurance as mandated by law. In addition, you'll pay disability insurance

Health and medical insurance. The larger the business grows, the more you'll want to consider some type of health insurance to cover your employees' medical costs and/or work-related injuries. Having a health plan in place will attract better, more qualified applicants. Generally, you pay for part of the total health insurance plan, and your employees contribute a portion as well.

D&O insurance. D&O insurance is shorthand for a directors’ and officers’ insurance policy. The goal of this policy is to protect a corporation's officers and directors from personal liability in the event of a claim or lawsuit against them — for example, one that claims wrongdoing in connection with the company’s business.

Vehicle insurance. This insurance covers liability for injuries caused by use of the vehicles owned and operated by your company, and provides additional coverage for the vehicles beyond that of property insurance. The more your business relies on vehicles for deliveries or for transporting goods, the more you can benefit from such insurance.

Web site insurance. In today’s Web-conscious world, this insurance is growing in popularity and significance. Web site insurance covers claims made against the company’s Web site or as a result of actions taken or items purchased through the company Web site. You should first check your policies to make sure you're not covered elsewhere. Web site insurance can protect you against lawsuits made in conjunction with activities on your site. These activities may include personal privacy matters, or even computer viruses that have resulted from visiting your site.

Key-person life insurance. This is a life insurance policy taken out on the owner of the business or the key person behind the business, in the event this individual dies. In a small business that is closely run by one person or a few key people, this type of insurance may be very worthwhile.