By C.N. Staff Writer
Being involved in a lawsuit is very common for business owners, but it is not something anyone wants to happen. Regardless of the precautions that you as a business owner might try, lawsuits may happen anyway. However, by planning carefully, paying attention to detail and controlling what you can, you can reduce the chance of a lawsuit damaging your business viability or your personal finances. As a small business owner, you have probably received plenty of advice about managing your business. However, when it comes to protecting yourself from lawsuits, good legal advice from an attorney is important.
Choose the Correct Structure for your Business
You have many choices on how to structure your business including sole proprietorship, corporation and LLC. The choice you make when you setup your business can have dramatic effects on your business including personal liability in the event you are sued. While waiting to create a formal structure for your business is easy since it forgoes the hassle of paperwork and filing fees, failure to structure your business could leave you personally liable for injuries or damages and even send you into bankruptcy. Before you establish your business, meet with a lawyer to discuss the options for structuring your business and the legal implications of each, and then choose the option that fits your business needs and best protects you in the event of a lawsuit.
Get Advice Tailored to your Business
The internet has made business advice, contract templates and even legal advice readably available online. While these are great resources for your business, they cannot provide the specific legal advice tailored to the needs of your business that is provided by a personal attorney. Consulting with an attorney before making major business decisions or entering into contracts can help you understand the potential ramifications for your business and save you money and hassle in the long term. Additionally, all businesses need liability insurance to protect the business from lawsuits. Accidents happen and insurance is an important resource that can limit the impact of a lawsuit on your business and prevent financial ruin. There is no one size fits all coverage when it comes to insurance. Work with your attorney and a licensed insurance broker to get the best coverage for your business.