Kathy Posner, 46, unknowingly spent five years with a gap in coverage--but lucky for her, she was afforded the opportunity to make changes before disaster struck. As founder of Comm Inc., a Chicago communications consulting firm, she learned the hard way how essential it is for entrepreneurs to have the right types of insurance for their businesses. "When I started my company in 1990, I had a partner who took care of most of the business aspects," she says. "When I bought him out in 1995, I discovered that we had never had workers' compensation insurance. Companies are required by law to have workers' comp, and if anyone had ever gotten injured, I would have lost my business and all my assets!"
To evaluate the extent of your current coverage, check out the Business Insurance Oracle Web site. Developed by Jerry Glenn, CEO of Western Sentry Insurance Brokers in Thousand Oaks, California, the site provides a good starting point for entrepreneurs via a basic insurance checklist. Glenn's biggest piece of advice: Avoid buying policies á la carte, like you would Chinese food. Instead, purchase them as a package deal and you'll receive a lower price. You'll also have only one party to hold responsible in the event of screw-ups.