While owning a business can be a dream come true, there are numerous legal risks and liabilities that can come with entrepreneurship. For those that in the process of starting a business, there are important steps that must be followed to protect themselves against the risk of a devastating lawsuit.
Invest In Prudent Liability Insurance Policies For Your Enterprise
One of the best ways of protecting your business against a lawsuit is to have liability insurance. These insurance policies will cover you in the event that you are sued for a number of reasons. However, commercial liability insurance policies can vary in the types of lawsuits and damages covered. As a result, you may find yourself needing to combine numerous types of policies to ensure you are adequately protected. One example of this may be to add errors and omissions coverage if you provide a service in addition to your standard liability coverage.
Install Surveillance Equipment
Having a verifiable record of the events that happen in and around your business's physical location can be invaluable in a number of different instances. When you are facing a lawsuit from someone that is claiming to have slipped and injured themselves, having video evidence of the incident can help to combat fraudulent claims. If you are concerned about the expenses of installing these security cameras, your insurance policy may offer a rebate or premium discount that can offset this expense. However, if your insurance does not offer these incentives, these policies can be more than worth the investment if they help you contest a fraudulent lawsuit over the time that you own them.
Understand The Risks Of Sole Proprietorships
One of the easier to overlook aspects of starting a business is choosing an organizational structure. Often, people will simply use a sole proprietorship due to the fact that this is one of the easiest types of businesses to establish. However, this type of business structure can expose your personal assets to lawsuits, penalties and debt collectors for your business. While you may not want to imagine your business failing or being sued, it is important to plan for this possibility. For example, you can minimize this risk by having a separate trust own your business or you can incorporate the business. The exact option will vary based on a number of factors, you should consider hiring a commercial attorney, like Vandeventer Black LLP, to help you decide on the correct legal structure for your enterprise. In addition to helping you choose an appropriate structure, these professionals will also be able to prepare and file the required legal documents on your behalf.