Risk management includes ways to insure your business against some of the risks it will face. It also covers strategies that can help you protect yourself and your personal wealth.

The concept of insurance is simple. It is built on the principle that if many people pool their money to form a large enough fund, together they can handle practically any financial disaster. It is a concept that has been around for a long time.

When most people think of insuring a business, they seldom think of the type of entity under which they are operating as a factor of primary significance. After all, isn't insurance all about risk? What does organizational structure have to do with risk? Taking a peek at the area of liability will demonstrate the enormous impact that "form of business" can have on the degree of risk exposure. Consider the fact that sole proprietors are personally liable for the debts their businesses incur. The corporate form of business generally shields owners from personal liability.

The way in which your business is structured is the cornerstone for ensuring your chances for success. From sole proprietorships to partnerships, to C corporations, to S corporations, to limited liability companies (LLCs), choosing a form of business means weighing advantages and disadvantages that will impact tax matters, insurance strategies, benefit options, and succession planning. Everything you do as a business will emanate from your business structure.

If you are about to start a business, professional guidance will prove invaluable in determining the form of business that makes the best sense for you personally and for the type of business you will be running. If you are currently a business owner and unsure if your present form of business suits your needs, seek counsel to help you examine the ramifications (particularly tax consequences) of changing your form of business entity.