Business insurance protects your company in two ways. Organizations that maintain inventory or own sophisticated equipment need to insure property in case it is stolen or damaged; replacing personal property with cash reserves could be a financial drain, leading to business interruption or bankruptcy. Contractors that perform work for other businesses or individuals need liability insurance. Financial liability typically results from some measure of negligence. A carpenter may build a faulty deck that collapses and causes personal injury, and a small business owner would have difficulty covering medical expenses and lost wages incurred by the harmed party. Some businesses may not have a lot at risk, opting to do without commercial insurance. Other independent contractors should not hesitate to obtain a business liability policy, without which a significant claim could spell doom. Individuals engaged in the trades should never operate without insurance. In fact, many cities and provinces have regulations mandating insurance for such businesses. This requirement is due to the possibility of significant damage done by a contractor to a customer’s property. Faulty wiring run by an electrician could cause a fire, registering structural damage ranging anywhere from a couple hundred dollars to a few hundred thousand, while a person who sells crafts such as sweaters or scarves may decide to remain uninsured, as potential harm to a buyer is unlikely. If you are undecided about carrying liability insurance, consider consulting an agent or broker. These professionals can assess your risk, recommending appropriate coverage or none at all.