6 reasons for small business insurance

When you launch your business, you need an avalanche of activity to get the ball rolling. It's exciting. But don't let all that excitement prevent you from addressing the basics. Exploring insurance should be near the top of your to-do-list, specifically a business owners policy (BOP). If you haven't heard of it, it's coverage designed to help protect many parts of your business.

You've probably got a lot going on. But don't let this slip into the category of "I wish I would have." If you get to that point, something bad, and perhaps costly, has already happened. "Like what?" you ask.

Here are six scenarios that should inspire you to check "add small business insurance" off your to-do list soon:

1. Somebody could sue you.

A few years ago, a major company was sued because they put too much ice in a drink. What? Sounds silly, but that's an example of a lawsuit coming out of left field. If one comes your way, the process alone could cost you time, money and energy.

Let's hope it won't happen to you, but if it does, small business insurance can help by providing business or commercial liability protection. In other words, your insurance company can step into the ring in the event you get sued.

Remember this: Hope is not a plan.

2. The wall between your personal finances and those of your business may be tiny.

According to the Small Business Administration, more than 85% of non-employer small businesses are sole proprietorships. While it's an easy approach to set up a business, it also puts your personal situation and finances at risk based on your business dealings.

In today's litigious environment, limiting your liability should be a priority. Business insurance, together with the right business structure, can provide invaluable protection.

Remember this: The liability protection provided by your personal insurance policies may not cover you if the liability is a result of business activity.

3. Your business income is essential.

Creating a larger alternate stream of income may have been at the heart of starting your business. But it's amazing how fast "extra income" can become another element of your core spending. With that, some sort of disaster or incident could jeopardize your family's finances. Without either legal separation or an insurance policy in place, your personal assets and income could be at risk. That's where small business insurance can come into play.

Remember this: Small business insurance policies can provide income replacement or continuation.

4. You're a magnet for cybercrime.

Businesses, especially new ones, might be at risk for cybercrime. From fraudulent money wire transfers to security breaches that put your clients at risk, cybercrime is a reality for all businesses in today's environment. You want to deploy an array of protective measures on this front. Even then, the worst can happen.

Remember this: Most business insurance policies can offer protection in the event of cybercrime as a part of the coverage or an additional option.

5. You need to protect your business property.

The intellectual prowess of the owner powers many startup businesses. But that's not always the case. Your business may have a host of furniture, equipment and other nonbuilding property. Even if that's not the case, it's likely you have computers and other business property. Losing them would be a major roadblock. Your personal property insurance, like your homeowners, renters or auto insurance policies may not cover property that's a business asset.

Remember this: You should help protect business property with business coverage.

6. You are in the market to add employees.

An extra hand could be a game-changer in your business. Adding the right person could bring valuable new skills and knowledge or free you up to do what you do best. But people don't come with guarantees. If it turns out you're mixed up in a wrongful termination or harassment lawsuit, your small business insurance could provide liability protection. If you have employees, you may need to provide workers' compensation protection in the event they're injured while working. Review your state laws for workers' compensation requirements.

Remember this: People are… well, people.

There's no better time than today to help protect your personal and professional well-being with small business insurance.