Every venture carries with it some measure of risk, and insurance is a clinical term for defining risk management. Most businesses will have protection against things like fire or theft, with written stipulations of an insurance company would deal with such events. A larger company might create a self-insurance fund, setting aside a portion of its proceeds into a special fund dedicated to covering specific losses. However, this avenue is generally beyond the fiscal reach of smaller companies.

Even the smallest businesses should be covered against loss of property and assets. Say you have a home-based business or rent a single room in an office building. Theft or fire not only mean you've lost possessions, you've also lost your tools for generating income and there is coverage available to guard against the loss of earning power while you get back on your feet.

Of course, if your enterprise grows, you'll have to consider insurance for employees to include health plans, workers comp, and perhaps even life insurance. The smaller the company, the higher your premiums will be because of your buying power. A large corporation can spread its risk among dozens or hundreds of employees. If there are only a half-dozen or fewer workers in your company, that leaves few people with whom to share the costs.