Understand why your business should have liability protection.
No one plans to have a pandemic or an accident, but planning for a potential event with liability protections is part of running a solid business. Maintaining business liability protections is critical in reducing the risk that your company can incur during a catastrophic event. Keep reading to understand why your business should have liability protection.
Understanding Liability
Liability consists of being responsible for something, and business liability comes in different forms. This includes financial and legal responsibilities. Generally, a business liability is a regular client or customer incident such as property damage or bodily injury. During COVID-19, liabilities included the spread of the virus to customers and employees and missing work deadlines due to the virus. Therefore, your business should have liability protection.
Creating an LLC
The only real way to protect yourself from your business’s legal and financial liabilities is by creating an LLC. An LLC can absorb debts separately from you personally. This basically means that you will not be personally accountable for repaying the company’s debts. In addition, an LLC can safeguard you in most cases from legal liabilities because the business is treated as a distinct legal entity that can be held responsible for negligence.
Buying Business Liability Insurance
Business liability insurance safeguards your company’s financial interests and you in case of lawsuits or third-party claims. This insurance type also covers direct financial liabilities you incur, like a customer hurt on the business property or medical costs from an employee. Additionally, some commercial business insurance plans benefit all companies, while others protect against risks for specific business types.
Oftentimes, accidents lead to significant legal bills that can affect your company’s financial health. You might want to secure professional liability coverage if your small business provides work and services. Ultimately, your business should have liability protection because it can cover missing project deadlines, omissions in your work, or offering ineffective business advice.
If you want to prevent lawsuits against your small business, contact us for more information on obtaining liability protection.
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