At the risk of over-simplifying, insurance for most small businesses can usually be thought of in two parts: Protecting your stuff (IE Property Insurance) and; Protecting other people from your actions (IE Liability Insurance).

Property Insurance usually covers things that you own, such as Buildings, Machinery, Equipment and Supplies and your Inventory. Each of these should have an amount of insurance that is designed to replace what you have in the event of loss. Replacing these things simply means that you need to buy enough coverage so that you receive enough money (less the policy Deductible, of course) after the loss to build back your building, buy back your machinery, equipment and supplies and repurchase or remanufacture your inventory. A good insurance agent who specializes in business coverage can help you determine the level of insurance that you should purchase to cover these items. The final decision is always yours in the end. Although there are additional types of coverage that you should explore, such as Loss of Income, these represent the bare bones of Property Insurance for your business policy.

Liability Insurance is designed to protect you for things that you or your business does to others. It should cover everything from a simple trip and fall injury on your premises, to Products you create or sell and Professional Liability for professional services you may render. These can represent significant losses for you and should be adequately protected against. Here again your agent can offer you various options from which you can choose the level of protection that you feel is appropriate.