Having a company that you can call your
very own is exciting and beneficial to your future prospects. However, with
owning a company comes the legal responsibilities that you have from one day to
the next. If you are ever sued by a worker or customer, you could lose
everything without the proper protection and coverage. Understanding how to
protect both yourself and your company from a liability can help to keep the
business running for many years to come.
Avoid Sole Proprietorship
Sole proprietorship simply means that there
is no distinction between the owner of a company and the actual business
itself. In the event of a lawsuit, if you don’t have enough coverage on your
commercial assets, the legal system will come after your personal property.
This could include your house, other real estate, your vehicles and anything
that could be used as collateral to pay
off legal fees and debts. Rather than begin your entrepreneurship as a sole
proprietor, consider changing your legal status to a limited liability company,
or LLC. This will protect your personal property and assets should something go wrong. For anyone seeking further guidance, the guide to starting an llc from Strategy Plus should answer your questions.
Obtain the Right Coverage
In the event of a lawsuit, having
protection in the form of insurance coverage is an absolute necessity. You can
insurance quotes online quickly and easily, and have the coverage that you
need in a matter of just a few minutes. These policies will typically pay for
legal fees, damages and other costs associated with a liability brought against
your business. This prevents you from having to shell out the money yourself,
which could result in the collapse of your enterprise.
Never Make Guarantees That You Can’t Back Up
One of the worst things an entrepreneur can
do is to make claims and guarantees that they wouldn’t be able to back up. For
instance, you might sell a product that you
have a guarantee on, but when a customer takes you up on this claim, you
back down and refuse to give them a refund or compensation. Likewise, it’s important
to avoid making claims and promises to employees just as much as your
customers. Don’t promise bonuses, promotions and raises if you aren’t planning
on actually giving these incentives to your workers.
Have a Legal Team Available
Regardless of the type of company you own,
you’ll want a legal team available at the ready when you need them. You never
know when a disgruntled employee or client will bring a lawsuit against you. A
legal team is there to help make settlements outside of the courtroom or
provide you with valuable information when it comes to actually handling the
situation. If you do need to go to court, they will be there to represent you,
and they can help with insurance claims when they need to be filed.
Keep Detailed Documents Regarding the Business
As a business owner, it is crucial that you
keep documents regarding your business and sales at all times. This paperwork
is the proof needed if someone were to ever bring a lawsuit against you and
your enterprise. Keep these documents detailed and well-filed so that they are
easy to access when necessary. Get your legal team involved when making out the
paperwork so that you know it’s being done properly.