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As a small business owner you’ve undoubtedly worked hard to build your company. But while you’re managing the day-to-day it’s just as important to plan for the unforeseeable future and protect your company and employees with small business insurance.

We live in a litigous society and there are many reasons your company could be sued. From asking unlawful pre-employment questions, termination errors and dishonest employee evaluations to uninformed medical request decisions, millions of civil lawsuits are filed every year in the United States.

Jim Cramer, the host of CNBC’s Mad Money and a co-founder and chairman of TheStreet.com, “regularly mentions that civil litigation in America costs the economy 2% of GNP (Gross National Product) each year. In other words, the sum of goods and services produced in America is reduced by 2% because of the economic confusion, distractions, delays, and dislocations caused by the American method of handling civil litigation,” according to LegalEthicsandReform.com.

“Two percent (2%) does not seem like much but consider that economists believe that one percent of GNP translates into about 1.2 million jobs. So it could be said that the American civil litigation system causes about 2.5 million people to be unemployed who would otherwise have jobs.”

So rather than lose sleep over these issues, you can take precautionary steps to protect your company; one of them is purchasing small business insurance. Since most entrepreneurs can’t self-fund attorney fees and possible awards resulting from a lawsuit or claim, it’s a worthwhile investment.

What options should you consider to protect your small business? Here are five coverage options every entrepreneur can benefit from:

1. Form a limited liability business entity for your company.

While not strictly a form of insurance, it can go a long way in shielding your personal assets (although not business assets) from creditors. Should your business encounter lawsuit abuse at least you won’t have to lose your home and personal finances in the fallout.

2. Commercial property insurance coverage.

Sure you and your employees may be very careful, but you cannot control the carelessness of others. Commonly experienced business losses including property damage and theft can significantly impact business operations. Should your business’s valuable assets be stolen, damaged or destroyed, with small business insurance coverage you can rest assured you will be adequately compensated.

For example, employee theft, known as “defalcation insurance,” should be a consideration for every small business owner with a large on-site staff. Other unforeseen hazards could impact your business location: such as flooding, earthquakes, tornado’s and hurricanes. Don’t forget to cover your business possessions as well as potential damage to the premises. If you are leasing corporate office space, chances are your landlord will have specified minimum coverage amounts in your lease.

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