Just Be Yourself

Should entrepreneurs be more concerned about identity theft than others are? "For a small-business owner, the stakes are much higher," says Mark MacGougan of Hartford Steam Boiler Inspection and Insurance Co. Business owners are popular targets for identity thieves, he says, because they typically have access to substantial lines of credit, they're engaged in a lot of transactions that could put their information at risk, and their personal and business finances are often intertwined. 

Most entrepreneurs who fall victim to identity theft don't have time to deal with the lengthy process of resolving the situation. And since identity theft often damages or destroys the victim's credit, a company that depends on its owner's credit to operate could end up in a dire situation.

One solution is identity theft insurance, which pays the direct costs of recovering from the crime and which may be packaged with services that handle much of the work for you. 

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Identity theft coverage is built into some commercial policies or can be bought as an endorsement to an existing package; it typically averages $30 a year. Many homeowners policies make this coverage available, but MacGougan cautions that some personal lines policies exclude losses arising from business activities. 

Jacquelyn Lynn is a freelance business writer in Orlando, Florida.