You can replace computer equipment, but that costs money. And if your business is out of commission for a month or two while you rebuild from a fire, you won't be earning anything along the way. That problem can destroy a company that might withstand the physical damage caused by a disaster.

Generally, insurance is the best safeguard against financial ruin. Standard property insurance will cover the loss of hardware, but is essential if you want a safety net to preserve your company against lost sales.

One other component of your small business needs to be protected: you. Do you want your business continue to operate after you've shuffled off this mortal coil? If the plan is to shut it down, how will that happen? How will ongoing ownership issues be determined? Who's going to run the show?