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Running a small business? There is a lot to know. For starters, insurance.

We know that running a small business involves significant investments. So what you need to consider is how you protect those investments, potential income, etc.

Business insurance protects your investments by minimizing financial risks associated with unexpected events such as an injured employee, lawsuit or natural disaster and even the death of a business partner.
If your business is an LLC or a corporation, your personal assets are protected from business liabilities; however, neither business structure is a substitute for liability insurance.

Business owners need to purchase general liability insurance to cover legal hassles due to accident, injuries and claims of negligence. These policies protect against payments as the result of bodily injury, property damage, medical expenses, libel, slander, the cost of defending lawsuits, and settlement bonds or judgments required during an appeal procedure.

If your company manufactures, wholesales, distributes or sells a product, your company most likely will be liable for its safety. Product liability insurance protects against financial loss as a result of a defect product that causes injury or bodily harm. The amount of insurance you should purchase depends on the products you sell or manufacture. A clothing store would have far less risk than a small appliance store, for example.

Your state government determines insurance requirements for businesses. Most states require businesses with employees to pay for workers' compensation insurance, unemployment insurance, and state disability insurance. Your state may require insurance of specific business activities. For example, if you own a car or truck and use it for business purposes, you may be required to purchase commercial auto insurance. Finally, your financial lender or investors may require you to maintain life, business interruption, fire, flood or other types of insurance to protect their investments.

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