For many business owners, the topic of business insurance is a challenging one to wrap their business risks around. It can be difficult to know which types of insurance to purchase and what each one covers. Having an understanding of the most common types of business insurance necessary for your business can go a long way toward clarifying what you may need and what you can leave out. So what are the most common types and when should you purchase them?

Business insurance is complex, but it doesn't have to be complicated.

Mandatory Insurance

The easiest place to start is with the types of mandatory insurance you should have. These are policies that many businesses are mandated to have in place. They include:

A small under insured personal injury can ruin a business.

You may not have $5,000 to $25,000 on hand and ready to cover one of the most common business accidents.

Here is how a common lease requirement can cost you: The problem lies within the lease terms.

Leases: These documents often specify that parties carry liability insurance covering “Personal Injury”, when in fact what they really require is insurance covering “Bodily Injury” (blood, bruises, broken bones or death).

Problem: You have a client who trips on a floor mat or phone cord. Maybe they slip on the ice, or a wet floor area. You have Personal Injury insurance per the terms of your lease.

Agents like to say that "a broker will make you broker and an agent is your friend."

The primary difference between an insurance broker and an insurance agent is who they represent. Initially it might appear that both represent the insurance buyer. Some might say that the term “Insurance Broker” sounds complicated and “Insurance Agent” sounds friendly. It is true that both act as intermediaries between insurance buyers and insurers. In full exposure, the broker represents the insurance buyer, an agent represents the insurance company.

How can this be? Why is there a difference and how does the difference affect me as an insurance client?