A surprising number of small businesspeople don't have health insurance, either because they don't know where to look for coverage, or can't afford it once they find it. This is a mistake, since an illness or accident can devastate your business if you don't have proper coverage.
Disability Insurance
Disability (or loss of income) insurance covers you in case you cannot work because of illness or injury. Disability policies typically insure 40 to 60 percent of your gross income. Look for insurance that covers you against an inability to perform your current occupation, since many policies may pay benefits only if you cannot do any work at all. Disability coverage is extremely important for a one-person business, since a sudden illness or injury that prevents you from working can put the survival of your company at stake.
Life Insurance
If you have only yourself to worry about, even insurance agents admit that you may be better off putting your money back into your business than investing it in life insurance. If you have a family or other people depending on you, life insurance is recommended.
Keyman Insurance
Consider this coverage if you are in a partnership, or if the survival of your business depends on a key employee. Keyman insurance is essentially a form of life insurance that covers you if this person dies. It may cover income this person generated, or the cost of replacing the functions he or she performed for your company.
Workers' Compensation
This insurance covers employees in case of work-related accidents. Most states require you to have workers' compensation insurance for any employees, even part-timers. Some states only require workers' comp insurance for companies with three or more employees.
