Wise advice.

You should have a good healthy limit on liability on your homeowner's, like $300,000, and you should then get an umbrella to lift you up to $1 million coverage. That's just for general insurance, it may or may not cover you for business purposes.

For your business, the first and foremost thing to protect yourself is to talk to a lawyer, to get competent qualified advice for your situation. Common advice is to incorporate (or form an LLC) for your business. That will separate your personal assets away from your corporation's, so if something does go wrong, they can only sue the corporation and not take away your house and car! Finally, once you have a corporation or LLC, a little business insurance is cheap protection; I've got a $2m liability policy that costs just $500 per year.

I can only speak to the situation down here.
Insurance comes in two basic parts, public liability (you cause someone physical injury) and professional indemnity.
The former you're nuts not to have and it's pretty cheap and more to the point because it affects people you don't have a contractual arrangement with you cannot get your liability waived.
Indemnity is far more tricky, the forms I got sent for my other line of work are damn right scary and the premiums can be staggering. However as you have a contractual arrangement with the only people who are able to sue a good lawyer should be able to word contracts such that you are held harmless. In fact from what I've discovered this is where things get really sticky.
I recently had a contract shoved under my nose and I was nearly going to sign it, until in a moment of unusual careful thought I rang a solictor and then a few insurance companies. Now to cut a long story short, the effect of the contract was to hold the other party harmless without any limitation of time or scope. So firstly the insurance company simply wouldn't underwrite such a risk as there was no limit to the risk but also they pointed out that as the liability wasn't limited to the duration of the contract I'd be paying premiums for the rest of my days.
Also be careful, down here directors of limited companies are personally liable for the losses of the company in some situations.
And as always, don't sign anything until you get a good lawyer to read it. Don't assume the other party is trying to pull a swifty either, quite probably they've cut a few corners and just copied a proforma contract without really knowing what it means either.
Bob.