Running a small business requires maintaining its financial stability. Financial strength comes from efficiently managing cash flow to keeping current with tax regulations and liabilities. Another crucial element of a company’s success is ensuring the business is protected against risks.

It may seem daunting to think of all that could possibly go wrong. An overturned crate on you floor leads to a slip-and-fall injury lawsuit. A delay in producing a finished product causes a missed deadline outlined in a client contract and now you have a professional liability lawsuit. You complete a replacement window job and six months later the homeowner is calling saying their windows are taking in water because you incorrectly installed the flashing causing their windows to leak.

Every business has its own unique risks. Understanding where your specific business may be exposed is an important first step. Next, you need to explore insurance options to limit the impact from any of the situations above. Yet, according to a recent report from McKinsey & Co. approximately 40% of sole proprietorships in the U.S. don’t carry coverage, leaving them exposed to any of the scenarios above and many more risks.

Many small businesses opt for a business owner policy that is designed to cover certain basic risks for companies across many different kinds of industries, including retail, wholesale, professional office, services, and manufacturing. These forms of insurance apply to most businesses and include:

• General Liability: Protection from a lawsuit or legal issues from customers or clients that believe your business is liable for causing them financial damage.
• Commercial Property Liability: Provides coverage in case the building you rent or own gets broken into and your property is stolen or vandalized.
• Professional Liability: This coverage is for protection against a product claim defect for businesses that produce, distribute or sell products at the retail level. It also is called Errors and Omissions insurance for companies that provide services to protect them from possible mistakes that might occur.

It’s important to keep in mind that having insurance is also a regular part of doing business today. For example, if you are looking to lease property or office space, most landlords will require that your business carries general liability coverage. Or say your organization is looking at taking on larger clients, they may likely ask if you have professional liability protection.

No matter what, most small businesses are required by state law, which does vary, to have workers compensation coverage. This covers employee injuries or deaths that could occur while doing business. Today, there are several additional types of insurance that small businesses need to be aware of and consider for their company:

• Commercial Auto: Protects employees and vehicles specifically owned by your business in case of an accident. Check to see that employees driving their own cars for work have sufficient coverage or if additional insurance is needed.
• Cyber Risk: This is one of the newest offerings available to companies. Small businesses are often considered to be at a greater risk for a cyber attack or breach. If such an event occurs there may be financial impact to your company and this insurance will help cover costs associated with notification and legal action.
• Business Interruption: If outside forces may interrupt your business operations, this coverage can compensate companies for their lost income.

Business owners need to provide financial stability in their workplace and that requires being able to accurately recognize their risks, reduce those exposures and make sure they are covered in case something happens. Every business has unique needs and there isn’t going to be a one-size-fits-all solution when it comes to business insurance. Educating yourself and working with an insurance professional should yield a strong protection strategy based on your goals that keeps you and your business on solid footing.