Starting a business isn’t easy, but thankfully there are a lot of top tips for small business owners out there that can help. From lean planning tips to tips on understanding the margins of your products and services, these helpful tips can save you a fortune. However, as a small business owner, you probably have some degree of liability when it comes to the operation of your entity, but the types of risks you face will vary broadly based on your particular line of work. Some types of business operations, among them food and beverage service establishments, expose you to a considerable degree of risk, but even businesses that do not seem overtly risky can get into trouble if someone files a lawsuit against them.
While you probably cannot foresee every potential lawsuit that comes your way, there are steps you can take to limit your liability as a business owner.
Business insurance
Getting business liability insurance is one of the widely adopted risk management methods. There are several liability insurance plans that cover the costs pertaining to property damage and liability claims. The most common types of liability insurance taken by small businesses are professional liability and general liability insurance. General liability insurance can protect your business against numerous lawsuits if your product or services cause or are been alleged to have caused injury or damage to others. Professional liability insurance can protect you and your business against claims arising from failure to meet professional expectations on services.
Choosing a business structure that minimizes liability
Certain types of business structures do more to protect your personal assets than others. In other words, if you want to make sure your home, car and what have you are not at risk should someone sue your business, consider establishing it as either an S corporation or a Limited Liability Company. Many small business owners opt for S corporations because they limit your personal liability, and they also offer a number of benefits come tax time. Others opt for LLCs, which are somewhat similar to S corporations but generally less complicated. This is also helpful when making the decision to close down your LLC, as there are fewer factors involved. Companies such as Click Dissolve and many more are there to help limited liability company owners when they decide to Dissolve a California LLC, or an LLC wherever they are. This makes the process a lot less complicated, matching the choice for why business owners choose an LLC in the first place.
Additional tips for minimizing liability
While establishing your business as an S corporation or an LLC from day one will limit your level of personal liability if someone sues your company, an S corporation or LLC only limits your liability for as long as you keep up with your annual paperwork and, if applicable, any renewal fees. Additionally, if you sign any contracts with your own name rather than your business name, this, too, exposes you to potential lawsuits, so it is wise to always sign contracts with your business name.
As a small business owner, you should also be ensuring your employee satisfaction to avoid further liability as a result of negligence to your staff. For this you need to be using a great HR system, so the employees feel like they are more in control and have greater benefits for their hard work. You could choose Gusto or Zenefits or any other good HR companies to supply your employees with the satisfaction they need to work hard and limit complaints within your company.
Owning your own business can be tremendously rewarding, but it also has inherent risks. Learning how to minimize those risks is essential for protecting yourself and your livelihood.
