If you own a business, you’re probably aware of the risks and potential threats to your company. Various situations can compromise a business, such as cyber-attacks, financial fraud, or even vandalism. However, to address these concerns and potential issues with your company, it’s essential to understand the legal considerations in protecting your business. Protecting your business requires much more than just having a will or updating your beneficiaries on your social media account; there are several legal structures that you can use to safeguard yourself and others from potential risks. Here are some helpful tips on protecting your business so you can focus on growing your company without worrying about liability or other threats.
Know Your Business Risks
Part of protecting your business understands your risks. For example, if you are in the retail or food industry, you may be required to have a commercial general liability insurance policy (CGL). This type of business insurance covers claims for bodily injury, property damage, and personal injury that your company may cause. The CGL may also cover the cost of defending against a lawsuit if a customer sues you and claims they got sick from your product. If you don’t have a CGL policy and are someone sues you, you’ll have to pay out of pocket. That’s why it’s essential to do your research and know what type of insurance you need. Moreover, you must protect yourself and your company against cybercriminals who may target you for financial gain. With so much data being transmitted and stored electronically, you must safeguard your company using the latest tools and techniques to protect against cyberattacks.
Depending on your business type, you may be able to protect yourself against liabilities by forming an LLC. The LLC structure protects against many claims and potential lawsuits. If you operate as a sole proprietorship or partnership, you may be held personally responsible for the debts and claims against your company. In contrast, operating as an LLC provides you with some protection from lawsuits and debts. However, there is a chance that you could be held personally responsible for some claims against your business, such as if you committed fraud or made false statements. If you wish to avoid this, you may consider incorporating your business to have maximum protection.
Insurance is essential even if you’re incorporated and operate as an LLC. You can’t predict when someone will bring a lawsuit against you, and you don’t want to put your personal assets at risk. As mentioned above, if you operate as a sole proprietorship or partnership, you must have CGL insurance. However, if you operate as an LLC, you may be able to get away with not having a CGL policy. You should consider getting this commercial insurance if you’re in a high-risk industry, such as the food or retail industry, as a CGL policy protects you from costly lawsuits. CommercialInsurance.net is a company that can provide commercial insurance for your business to protect you from the claims mentioned above.
Cybersecurity is a significant concern for businesses of all types. Hackers are often looking for vulnerabilities and any data that is unencrypted. When operating as a sole proprietorship or partnership, you may have some protection from lawsuits due to the limitations of your insurance policy; however, if you operate as an LLC because the policy protects the LLC members. This means you’re fully covered against any data breaches, such as a stolen laptop or if sensitive information like credit card information is stolen. Finally, having the latest tools and techniques for protecting your company from cyberattacks is essential. One way to do this is using data-encryption software, like Symantec Endpoint Protection.