Cover Charge

Although it isn't one of the top five insurance coverages required, Fairbrother suggests that as your business grows, particularly if it is a partnership, you should seriously consider "key man" insurance. This insures the lives of principals in partnerships and enables the survivor to buy the business from the estate of the deceased partner for a predetermined amount.

There is also key man insurance for key employees in a corporation. For example, if the salesperson who produces 80 percent of your business is killed, the insurance buys you time to reorganize and replace that individual.

If all this seems complicated, think of it like this, suggests Mooney: Insurance is a financial and legal shield that protects the capital and sweat equity you've put into your business from unexpected disaster. Take the time to carefully investigate before you buy, and when the unthinkable happens, you'll be prepared.

This article was originally published in the February 1996 print edition of Entrepreneur with the headline: Cover Charge.