As a small business owner, you may think of insurance as an expense that you are forced to incur.  Instead, think of insurance as an investment in safeguarding the business that you have worked so hard to build.  Buying an insurance policy transfers the risk of fire, theft or other perils to the insurance carrier, and allows you to concentrate on running your business.

Most likely you carry at least basic property and liability protection, but you may leave your business assets exposed to loss from other perils.  It is important to note that not carrying certain coverages does not exempt you from liability in the event that a related incident arises. Ask yourself if you really want to save a few dollars in premium costs if it means putting your business at risk.

Following are a few questions that you should consider:

-                  If one of your employees is injured on the job, could you afford to pay for his/her medical expenses?  Workers’ compensation provides coverage for employees who are injured or disabled while at work. Medical care, changing workplaces and workers, loss reporting, litigation and deliberate fraud can all drive workers’ compensation costs. 

-                  If your business had to close for several months due to damage to your building, could you afford to stay in business?  Business interruption coverage reimburses lost income while your business is being repaired or reconstructed from a covered peril.

-                  Do you rely on complex machinery for the daily operation of your business?  Computers, printing presses, manufacturing equipment and other machines can break, resulting in costly repairs and lost productivity. Equipment breakdown coverage includes the break down of machinery and equipment, mechanical or electrical failure and related losses and damages.

-                  Does your business rely heavily on one or more key suppliers, or key customers?  If that key supplier were destroyed by a fire, what would happen to your business?  Business income and extra expense from dependent property provides protection for businesses that rely on other businesses – either as a supplier or as a customer. This reliance can create exposures not covered or complemented by many general policies.

-                  Have you ever hired or fired an employee?  If so, you could be open to a lawsuit alleging improper Employment practices.  Common accusations include sexual harassment, discrimination and hostile workplace.  Defending against a suit can cost tens of thousands of dollars and many months of time away from your business.

The next time you think about your insurance policies, consider how much time and money you have invested into your business, and ask your independent insurance agent how to best protect everything that you’ve built.

One or more of the CNA companies provide the products and/or services described. The information is intended to present a general overview for illustrative purposes only. It is not intended to constitute a binding contract. Please remember that only the relevant insurance policy can provide the actual terms, coverages, amounts, conditions and exclusions for an insured. All products and services may not be available in all states and may be subject to change without notice. CNA is a registered trademark of CNA Financial Corporation. Copyright © 2010 CNA. All rights reserved.

Peter Kierys is a national marketing director of Small Business for CNA.