Are there any specific types of insurance I should consider to cover specific losses?
You may want to insure against several eventualities that generally are not covered by business owner's policies:
Business interruption insurance (often referred to as business continuation insurance) will offset losses if the business is forced to shut down for a substantial period because of a fire, a flood, or some other catastrophe.
Product liability insurance protects you against damage claims filed by third parties injured by a product produced by your business. If you sell food or any product that you make, you'd better have it.
Workers' compensation insurance is of great benefit to businesspeople. It protects you against damages that arise under your state's workers' compensation system. All states have such a system. It requires that workers be paid for injuries they suffer on the job, no matter what the cause. Even if the employee is clearly at fault, you'll have to pay, though under state law the benefits are set according to a preexisting schedule and are relatively low. You're well advised to carry insurance against this risk.
Disability (or loss of income) insurance pays a portion of your gross income if you have a long-term disability and cannot work.
Life insurance will provide a death benefit to your family. If you have co-owners, you can take out a policy that names them as beneficiaries and provides funds to compensate the business for your loss and funds to purchase your interest in the company. This key person insurance thus benefits your family and keeps the business going.
American Bar Association Family Legal Guide Copyright © 2004 American Bar Association