Carefully consider liability to make best choice in insurance

Carefully consider your liability. For example, third parties such as customers or others might sue the business for injury or property damage caused by the business. Umbrella liability policies are one popular solution to this risk. An expert advisor can help you tailor liability coverage to fit your circumstances.

Injury to employees is another area of potential liability. Workers' compensation insurance is required for almost all businesses in almost all jurisdictions. "That's a key distinction [from] property and liability," Jeffrey Olmstead notes. "If a business owner chooses not to acquire property and liability coverage, that's a chance they can take. But with regard to workers' comp, it's required."

Other risks depend on the business you are getting into. A restaurant that serves alcohol faces potential liability if one of its customers is involved in an accident after leaving the restaurant. "That's a specialized exposure," Olmstead says, "and there is specialized coverage for liquor liability that covers against lawsuits that come back to the business owner because of improper service of alcohol."

Understand your business thoroughly so you can decide whether or not to pursue specialized coverage.

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