Today, I want to talk about an important topic that most consultants do not like to think about: insurance. Why? Because it’s a dry subject and no one wants to think about what bad things can happen to you. But part of having your own business is to protect yourself from liability and loss. So whether you like it or not, as it is with death and taxes, you have to face the music some day.

It doesn’t have to be all gloom and doom. A little advance planning can save you a ton of headaches down the road. And while you don’t want clients or employees to sue you, have your business burn down, or get sick, these are business realities that you have to plan for if you want to stay in business. Because it only takes one lawsuit or accident to put you out of business.

Professional Liability Insurance

Also known as , this is coverage for professionals for claims made by clients asserting negligence during the course of providing a service.

Every professional should have E&O insurance (some professions, like attorneys, have mandated requirements for this type of insurance to protect the public). This type of insurance not only covers negligent acts, but failure to act, non-performance, mishandling/loss of client information as well as other torts like /slander, and misappropriation of intellectual property. Just be sure that your policy provides for attorneys fees and court-awarded judgments.

Commercial Property Insurance and Business Property Insurance

If you own the building where your office resides, then commercial property insurance is a must. This insurance protects the physical assets of your business, from the building to your inventory, to furniture and equipment. It’s a protection against damage from fires, broken water pipes, and storms. It’s also a protection against theft and vandalism.

Business Overhead Expense Insurance

While we don’t like to think about it, sometimes life can throw you a curve ball and leave you unable to work. If you are a sole proprietor, your inability to work means all income stops. If you become incapacitated in any way, will you have enough savings to last until you are well enough again to work? What if you become permanently disabled? What then?

Having a Business Overhead Expense Insurance means that your business can continue despite your absence due to injury or sickness. It covers things like rent, utilities, employee salaries and the many expenses that a business have.

Disability Income Insurance

While you are incapacitated, you still need money to survive. This insurance makes sure that you have a continued income stream while you recover from your disability. Another way to look at it is that it’s paycheck protection. If you are unable to work and produce income, the insurance will provide you with the ability to meet your financial obligations such as mortgage payments and household bills.

Going over all the insurance coverage you might need may seem daunting at first, but it is an important discussion that you should have with your insurance agent as well as your significant other. Do not wait until something bad happens. By then, it’s too late and you might lose everything you worked so hard for.