There are a lot of people who dream of someday starting their own business. They either have a great idea they know they can capitalize on; or they have a natural talent that can be monetized. Regardless of your reasons, becoming your own boss is something to be celebrated; the epitome of the American dream.
But what’s also part and parcel of the American way of life is an over litigious society. Whether as a result of an honest misunderstanding, neglectful conduct, or people looking for an opportunity to make a quick buck, business lawsuits are an every day occurrence. Keeping these factors in mind, it’s essential to come up with a plan to protect your personal assets.
- Always consult with an experienced business attorney: This is not the time to cut costs or corners. A wrong move could leave you vulnerable. Granted, your home in Florida may have homestead protections; but you could still end up losing assets and resources over a lawsuit.
- Establish a business entity: Establishing a Limited Liability Company, a Limited Partnership, or corporation means your business is a separate entity from yourself. As a result, in the event of a lawsuit, you will not be personally liable for your business’ debts. On the other hand, if you’re a sole proprietor, creditors can go after you personally.
- Keep separate bank accounts: Not only will this make things easier come tax time, but by not commingling business funds with personal funds, you’ll prevent muddling the line between business and personal assets.
- Get proper insurance coverage: If someone falls on your premises, or a disgruntled employee sues you for a labor law and employment issue, or another business claims you’ve breached a contract, it can result in great financial loss. Even if you were to prevail in a lawsuit, attorney’s fees add up fast. By having insurance coverage, you transfer the financial burden to the insurance company. There is one caveat, however: insurance policies are complex and highly nuanced. Don’t assume that just because you have business insurance, you’ve got your bases covered. Carefully study that policy and make a list of questions: Would it cover professional liability (errors and omissions or E&O)? Worker’s compensation? Accidents on premises? Product liability? Every business is different, and it behooves you to get a customized policy that really covers your specific needs.
Protecting your assets is a serious issue that requires more than a cursory online search. Hunter Business Law can help you determine which options best protect both your business and your personal assets. You’ve put a lot of time, money, and effort into becoming an entrepreneur. Don’t let a misstep place it all in jeopardy. Contact us and get some peace of mind.
This Blog was written by Hunter Business Law Founder, Attorney Sheryl Hunter. View her profile HERE.