But there are always the “What ifs”. Things like – “What if I get sick, how do I pay my bills” or “What if I have a fire, how do I keep my business running”. Simply put, the one thing you do not want is to have the business you have labored so tirelessly to build to hit a financial snag.

If you are a sole proprietor or a partnership, both your business and personal liabilities are at risk. Just because you incorporate or use an LLC doesn’t mean you escape liability. People think so but you can become personally liable if you sign a personal guarantee on a loan or personally injure someone or act irresponsibility.

There is an answer and it is called business insurance. Owning business liability insurance can and does protects your business and personal life from financial ruin. The following information is limited to Business Interruption, Overhead, Umbrella Liability and Liability Insurance. The types of insurance are explained as well as what they offer you and your business.

Business Interruption Insurance

Business Interruption Insurance helps to insure against any economic losses you may encounter if something should happen to close down your business. For example, you have a fire in your corner of the house – your business office. Your home is covered for property damage – thus, the rebuilding is covered. Business Interruption Insurance will also cover lost income while you rebuild.

Overhead Insurance

There is one type of business insurance you may want to consider when your business is making a good profit. It is called Overhead Insurance. Overhead Insurance covers rent, salaries, utilities, insurance premiums and/or interest payments related to the business – this type of insurance would cover you in case of a major illness or accident.

Umbrella Liability Insurance

Umbrella Liability Insurance is used for catastrophic losses. This will protect you in the event someone wants to sue you. An umbrella policy will upgrade your basic auto, homeowners or business insurance to cover these unforeseen events.

Liability Insurance

If you have people coming to your home-based business, than liability insurance may be something you should look into it. Liability insurance will cover you against claims made by others against you for injuries or damages that occurred on your property.
It is true your homeowner’s policy probably includes some liability insurance, but it may not cover you for liability claims caused by you or your business. Therefore, it is wise to inquire about liability insurance.