As the owner of any business, from simple one person operations to large enterprises with multiple employees, it is your primary responsibility to protect your assets and investment from the threat of lawsuits. One of the most distressing symptoms of the extended economic recession currently afflicting America is the increasingly prevalent use of frivolous litigation. Cash strapped individuals or those struggling under the burden of massive debt are turning to lawsuits out of desperation, and unwitting business owners can quickly become easy targets. Additionally, the complex nature of legally operating a business means that you may unintentionally expose yourself to legal liability through simple oversight. If you fail to maintain the proper licenses, allow your certifications to expire or conduct business without adequate insurance coverage, your business may be forced to endure a lengthy and costly civil trial. Fortunately, there are a number of simple and effective ways to protect your business against lawsuits and by integrating these tips into your business model you can be sure that your assets are safeguarded.
One of the most overlooked ways to protect your business from lawsuits is to obtain a comprehensive liability insurance policy which covers the workers under your employ. Accidents and injuries on the job are the leading cause of litigation against small businesses and many business owners find themselves woefully unprepared to handle lawsuits of this variety. Because many small businesses are operated by families or close friends who work together, the prospect of an employee suing you may appear to be remote at best. If your college roommate is the sole employee of your business then neglecting to purchase employee liability insurance can be very easy, but if that same employee slips and falls or otherwise injures themselves while at work the liability falls on you as the principal owner. No matter the size and scope of your individual business it is imperative that your purchase a broad policy of employee liability insurance coverage to protect your assets from civil judgment.
Considering the type of business you own is also a critical component in assessing how protected you are from lawsuits. If you operate a sole proprietorship, for example, you are exposing your personal assets to potential seizure in the event of an unexpected lawsuit. Many business owners choose to begin with a sole proprietorship without taking this fact into account, and when litigation inevitably occurs they find themselves unprepared to protect their investment. Savvy business owners know that incorporating their business venture prior to its launch can effectively shield your personal assets, such as your home, automobile and investment portfolio, from claims by aggrieved former customers. Incorporating a business may sound difficult but the process is actually quite straightforward. Many helpful websites like LegalZoom provide the necessary incorporation forms and even help business owners with the submission process for a reasonable fee. The incorporation of your business and the purchase of employee liability coverage are both essential steps in protecting your venture from the threat of lawsuits.
Elizabeth Retton is a contributing writer for the Maryland Injury Lawyer Group at Price Benowitz LLP. The firm has offices in Washington, DC, Maryland, Virginia, and New York and handles DUI, criminal, immigration, personal injury, and disability cases.