There’s no doubt social networking is here to stay. Sites like Facebook, LinkedIn and Twitter have exploded in popularity, but they’re also opening people up to identity theft and lawsuits, according to a report by registeredrep.com. The site says research done by Chubb Group of Insurance Companies found that the sites are opening up the affluent to lawsuits involving slander and libel.

For instance, children of wealthy individuals who put an inappropriate comment on their Facebook status or send out a damaging tweet could be exposing their parents to costly lawsuits, according to Jim Fiske, vice president and US marketing manager for Chubb. “One client’s son and friends had created on MySpace a real-looking but fictitious page for their teacher,” Fiske told registeredrep.com. “They had imported pornographic material and superimposed the teacher’s head on the bodies. The teacher filed a lawsuit for slander, which is not covered by most standard liability insurance policies. The boy’s family was on the hook for a million dollars in defense and settlement costs.”

According to experts, this is an example of why financial advisors and wealth managers need to evaluate their clients’ insurance policies to find out if their covered for unusual circumstances like this. It’s called risk management and it can expose a client’s property and liability exposure. “It underscores that wealth preservation is just as important for wealth managers as wealth accumulation,” Fiske told the website.

According to a new report by Inc, life insurance policies aren’t just for protecting families. They’re helping businesses too. If your business burns down you’re likely protected by insurance. But what if your key employee dies? Life insurance policies are a tool for small businesses who risk losing someone that is key to the success of their company.  “Depending on the type of insurance you purchase, the ownership structure, and beneficiary of the insurance, life insurance can provide financial protection, risk management, and asset protection,” says Josh Patrick, in an Inc report. Patrick is the founding principal in Stage 2 Planning Partners, a financial-planning firm that helps businesses.

These types of insurance policies can help during this time of transition. They can be used to hire new help or just keep the lights on and the doors open, according to experts. “The goal should be if in the event of the death of a major shareholder or other key person that the business can be able to continue with minimal financial interruption,” says Matt Tassey, according to Inc. He’s the past chairman of a nonprofit that helps people make smart insurance decisions. “You can’t do anything about the human interruptions,” Tassey told Inc. “But you can make sure the doors stay open, the light bill gets paid, and the mortgage gets paid.”

Deciding whether to purchase life insurance for your business can be a tough decision. Every business owner knows there are dozens of ways to spend extra money, but it’s important to weigh out the decision carefully. Think about what would happen if the company lost key employees and whether it’s a change the business could survive.  “Insurance is to insure a risk that you can’t afford, so if in your business one of your key people were to die, what would it cost you to replace that person? If you were to die, what is the chance for your business surviving? And what kind of impact would that have on your family?” Patrick told Inc. “If it’s more risk than you can afford, then protect yourself and your business with insurance.”

There are many truths in the insurance world that the average person is not aware of. The problem is that not knowing the ins and outs of various types of insurance can cost you. What you don’t know about insurance could hurt you so start learning everything you need to know.

Getting the most out of insurance policies means more than just getting the best deal. You need to maintain the coverage levels that you need while seeking out good prices on policies.