Dealing with a serious liability dispute is the ultimate nightmare for most business owners. You risk losing your business if you don't have the proper protection in place. Finding ways to minimize risk allows you to focus on growing your business and generating more revenue. To assist you through the process, here's a look at some strategies to implement that will reduce the likelihood of a serious liability dispute.
Successful businesses have great structure. Most businesses are classified as limited liability corporations. Structuring your business as an LLC protects you if a liability dispute arises. Perhaps the impacted party decides to sue. Under the structure of an LLC, your business assets are at risk, but your personal assets are secure. Structuring your business as an LLC differs from a sole proprietorship, where your personal assets are also at risk during litigation.
Structuring your business as a corporation is another option. Opting to structure your business as a corporation means you'll have to make decisions based on the best interests of people like your shareholders. You should speak with a business lawyer before making a final decision.
While accidents are likely to occur at some point, prioritizing safety helps minimize the level of risk and prevent serious incidents. Perhaps that means renovating your property to eliminate potential customer hazards. Maybe you plan to overhaul your business' safety procedures. Prioritizing safety could help you earn the benefit of the doubt during litigation. Showing the court that you have good safety procedures in place will put you in a better position to win.
Many businesses have suffered damage due to outbreaks. Perhaps one of your employees comes to work one day feeling a little sick. That illness could spread throughout the entire environment within a few days. You also have to consider the possibility of your products making customers become ill. It's recommended that you implement strategies to help maintain a clean work environment. Installing a few hand sanitizer stations is recommended. It's also important to clean the environment on a regular basis. You may be forced to shut down your business if an outbreak happens, which could damage your reputation.
The easiest way to minimize risk is by purchasing enough insurance so that you're covered in any situation. While mandatory in most states in order to legally operate your business, general liability insurance is an asset. General liability insurance covers your business if a customer sustains an injury on your property on alleges that your products made them ill. General liability insurance will help cover your legal fees if the injured party chooses to sue you.
Product liability insurance has similar protections. Commercial property insurance covers your inventory and equipment if it's damaged or stolen. Adding professional liability insurance is recommended depending on the type of business you have. The policy covers your business against allegations of malpractice and negligence. Purchasing home-based insurance is recommended if you rely on remote workers to get things done.
Perhaps you decide to slightly misrepresent your business to help attract more customers. Generally, this type of behavior backfires in the long run. One of your customers may decide to sue once they find out the truth. This could do long-term damage to your business. It's recommended that you adhere to all industry guidelines and only make valid statements that are backed by data. Being transparent with your customers will help expand your business.
Opening a business is a major investment. You have to manage a lot of variables to ensure that your business continues to grow well into the future. Purchasing enough insurance to protect your business during emergencies is vital. If you're having trouble finding the right coverage, contact the team here at CF&P Insurance Brokers, and we will assist you.
