FORTUNE Small Business:

Shopping for the best business insurance policy

What you'll need varies depending on where you work and what you do, but Ask FSB's experts weigh in with a road map for determining your insurance needs.

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(FORTUNE Small Business) -- Dear FSB: How do we go about getting insurance for our business? We own an office services company.

- Nikki Olivarez, Waco, Texas

Dear Nikki: Start by deciding what type of insurance you need for your particular business.

"Some types of coverage, such as workers' compensation insurance, are mandated by law, while others may be required by a lender or a customer," says Jonathan Bennett, executive vice president, personal and small business insurance at The Hartford Financial Services Group (HIG, Fortune 500).

The types of insurance you need varies, explains Gene Fairbrother, lead small-business consultant for the National Association for the Self-Employed.

"For example, if you operate a business out of your home, you're going to want to make sure your homeowner's insurance has home office coverage," he says. "If you rent office or retail space, the landlord will probably have a requirement for liability insurance, but you want to look beyond that at liability for slipping and falling; look into coverage for property and content if you have inventory or office furniture."

Professionals such as accountants or insurance salesman should consider errors and omissions insurance, similar to malpractice insurance for doctors. Business continuations insurance is another option.

"For example, if you had a boutique or print shop and it burns down and six months go by before the plaza is rebuilt and new equipment comes in, how would you survive? Business continuation insurance would pay you the money you'd normally make during that time so the business can survive," says Fairbrother. Key man insurance is another type of coverage that pays off, similarly to life insurance, if a "key man" to the business's operation is incapacitated.

The Small Business Administration provides descriptions of different types of business insurance. "The Business Owner's Playbook," available at, explores a range of business and personal-finance issues for different stages of a business's lifecycle, including insurance decisions. Both sites are good places to begin before heading out to speak with agents.

When you're ready for shopping, be sure to speak with at least two or three agents, and stick with national carriers, says Fairbrother.

"See if the agents are familiar with your business and if they can help you prioritize which insurance is most important," he says. "The agents can also give you an idea of premium cost and you can then determine the balance between your budget and the level of risk you want to take."

How about BOP?
"A Business Owner's Policy, or BOP, generally combines three important types of coverage for any business: property insurance, business interruption insurance and general liability protection," says Bennett. "Buying as a package is usually less costly than purchasing them individually."

Additionally, Fairbrother suggests checking with any national industry organizations, trade groups, or local chambers of commerce you belong to, as these groups often have alliances with carriers that could mean better prices for your business. To top of page

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