In the perfect world everyone is happy with everything and there is no reason to worry about risk to your business. Unfortunately this altered reality only exists in a dream world and there is always a potential for risk to be lurking around the corner which can in turn upend your business as you know it. It doesn’t matter if you own a business that is very careful and crosses every ‘T’ and dots every ‘I’. If a customer has a perception of any wrong doing there’s always a potential for your business to be libel for it.
Although not all businesses carry the same potential for risk there’s always a potential for that something unexpected to happen. The more you understand what issues can possibly cause liability to your business, the better you can minimize it.
Here are some areas that can leave your business vulnerable and open to liability:
Employment Related Practices
This includes wrongful termination, defamation claims made by an employee against you, or wrongful refusal to employee someone. Understanding laws and actions that affect current, future or even past employees can help lessen the potential of you and your business being at risk
You Own a Liquor Related Business
Do you own a business that manufactures, sells, serves or assists in the use or purchase of alcohol? If you’ve answered yes to this you are at risk of having a claim brought against your business. These claims can be a result of loss or damages that come as a result of a customer becoming intoxicated or injured. It can also be a result of an intoxicated customer injuring someone else.
Non Business Owned Vehicles
If you drive a vehicle that is not owned by your business or if an employee uses their own vehicle for business purposes your business can be at potential risk. If an accident should occur your business could potentially have to foot the bill for damages incurred.
Even if you are in the service industry, such as salon owners, personal trainers or even business consultants, there is a potential for a customer or client to hold you liable for a mishap. This could be a result of negligence, failure to complete a service or even misrepresentation of an offer.
Now that you know of potential areas that can leave your business open to liability, here are a few things you can do to reduce the potential:
Look at Your Business Structure
There are different ways you can structure your business, from sole proprietorship to a corporation. Each carries its own level of liability. If you run your business as a sole proprietor you run the chance of putting your personal assets at risk should your business be sued. A way to offset potential liability is to form a Limited Liability Company (LLC) or have your business become incorporated.
Have Liability Insurance
Oh no, your business has been sued! If that ever happens having liability insurance can help protect your business. There are different types of business liability insurance, from product coverage to professional liability. Meeting with an insurance agent that offers business liability insurance can help tailor a policy specific to your business.
Although you hope something catastrophic resulting in a lawsuit or liability to your business never occurs you still should become proactive in limiting it from happening. Understanding what constitutes the potential for business liability and what you can do to protect your business from it can be very beneficial in the long run for your business.
Let’s hear from you. What are you doing to limit your business’s liability? Tell us in the comment section below.
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