Insurance might not be the first thing someone thinks about when starting a new business, but it should be an important consideration when planning a business.

New business owners become risk managers. They have the task of determining the exposures they have to different kinds of risks and deciding how best to handle the risk involved. Insurance is a way to address the exposure by letting someone else be at risk in case of a loss. You are transferring that risk to the insurance company.

The decision to purchase insurance can be a tough one because many new businesses are on a tight budget. The business owner must make decisions regarding what he or she can take a risk on and what to pass on to the insurance company.

When just starting out, the business owner might decide to take more of a risk in certain areas than others. An example would be a business owner who insures a company truck but takes a chance on tools and equipment until the owner can afford to insure them.

These are some of the types of coverages new business owners should consider:

— Property insurance for buildings, contents, stock, fixtures, etc.;

— General liability insurance for damage the insured business might do to someone else's property as a result of the insured's negligence. It also covers completed operations and products businesses manufacture;

— Business interruption coverage to provide money to take care of a business' ongoing expenses if the business suffers some kind of loss that causes operations to cease;

— Workers compensation, which covers the employees of the business when they are injured on the job;

— Business auto for a company's commercial automobiles and trailers;

— Inland marine for tools, equipment and specialized machinery; and

— Life insurance in case something happens to the owner or other key person.

Most all of us have some experience with insurance. We have been insuring our homes, automobiles and other valuables for most of our adult lives.

However, commercial insurance can be more complex than personal insurance and sometimes involves different terminology as well. That is why the Kilgore College Small Business Development Center includes a section on insurance in an eight-week course it offers twice a year on how to start a new business in East Texas — to provide entrepreneurs a basic understanding of the insurance they might need and the terminology that will help them talk to an insurance agent.

Larry Clemens, a certified insurance counselor, is with Brown Cook & Taylor Insurance in Gladewater. He is one of the instructors for the Kilgore College Small Business Development Center's course "How to Start and Operate a Business in East Texas." For information, call (903) 757-5857 or (800) 338-7232. Send questions or comments about this column to Business Editor Jo Lee Ferguson at jferguson@longview-news.com.