Remember Me
forgot your password?

Limit Your Liability To Protect Your Assets

If your business runs into serious difficulty, will it bring you down too? For example, what if one of your employees got involved in a serious car accident while working for you? Will the resulting lawsuit bankrupt you personally?

Here are just a few ways of protecting yourself against catastrophic losses and lawsuits.

1. Obtain Adequate Insurance Coverage

If someone slips on the sidewalk of your home and injures himself, he could sue you for damages. Your tenants or homeowners policy may cover you for liability in such an event.

However, what if it is your customer who falls on his way to visiting your home-based business? You will need an extra rider on your house insurance to cover such incidental business use. The extra charge for this additional coverage is well worth it.

If you use a car for business use, insure it for such. Some people think that they are being clever writing off automobile expenses for income tax purposes but at the same time not informing the insurance company that the car is being used for business.

This is false economy. If you ever get into an accident, police and insurance investigators will certainly find out that you used the vehicle for business purposes. If youre not paying for business coverage, why would the insurance company cover your claim? <br /> <br />As well, what do you think an income tax auditor would think of your claimed business expenses on the vehicle when your insurance policy indicates personal coverage only? Avoid this additional exposure to tax liability. <br /> <br />Be sure to obtain required workers compensation coverage. Some have been held responsible for all the medical and other expenses of an injured worker, as well as fines for non-compliance to the law. These costs can be quite substantial and even bankrupt you.

Consider obtaining product liability insurance. This applies not just for any products you manufacture but also for products you sell that are made by others.

2. Incorporate Your Business

Insurance may give you some protection against loss. However, you may suffer business losses and lawsuits that may not be covered by your insurance fully. What then?

An extra level of protection can be obtained by forming your own corporation. Even though incorporating yourself will result in extra paperwork and costs, it could be the best insurance you ever bought.

This is because the corporation is a seperate legal entity or person. Even though you may own the corporation, if the corporation operates the business, it is the corporation that will be sued or suffer loss.

If, for example, the corporation had severe business losses resulting in debts that could not be repaid, the corporation would be insolvent. You, as a shareholder, would lose your investment in the company but would generally not be responsible for any of its debts. Thus, you would not have to sell your home or other personal assets to cover the corporations liabilities. <br /> <br />On the other hand, there are cases where directors of a corporation can be held responsible for liabilities if they didnt act responsibly. You can`t hide behind a corporation, commit criminal acts and expect to escape accountability.

3. Protect Yourself With Legal Agreements

Properly drafted written agreements can protect you in many ways. First of all, they can sometimes prevent misunderstandings that can lead to legal problems. Secondly, they may limit your exposure to lawsuits and losses.

Contracts can limit your exposure to liability by including provisions restricting the scope of your work and responsibility, having disputes handled by arbitration rather than through the Courts, and specifying that the maximum damages payable shall not exceed the amount of the contract.

A special area to watch out for is the Internet. There are many laws that impact on websites including matters affecting children, privacy, earnings claims, and unsolicited e-mail ("spam"). Certain agreements and notices on your website may help to protect you.

Protect yourself from catastrophic losses and lawsuits. Take steps today to protect your assets by limiting your exposure to liability.

Stephen Pope

J. Stephen Pope, President of Pope Consulting Inc., has been helping clients to earn maximum business profits for over twenty-five years. For profitable Work at Home Small Business Ideas, http://www.yenommarketinginc.com/ To see how you can profit from incorporating yourself, visit: http://www.yenommarketinginc.com/incorporation.html

Rate this Article: 0 / 5 stars - 0 vote(s)
Print Email Re-Publish

Add new Comment



Captcha

  • Latest Affiliate Programs Articles
  • More from Stephen Pope

Ready To Become an online Success Story

By: Royce Whitehead | 30/12/2009
Prepared To Become a web Success Story? You have positively heard about them : the millionaire net trend setters that spent their time making a powerful business instead of spending hours at a real job. Whether you read their stories and shook them off, or were galvanized and inspired by their achievement, it's no doubt how effective and potent they've become. While the internet has often been the domain of mystery and little takings, today it's becoming a lucrative takings to...

How to Pick the Best Affiliate Programs

By: Koby Gur | 30/12/2009
With so many people trying to make some money with affiliate marketing, it is becoming crucial to find the best affiliate marketing programs. Best no only in terms of money and commission but also in terms of best fit to your goals and needs. The more successful affiliate marketing people actually working full time job in that area but only for few hours a day since this field is so rewarding in terms of potential source of revenue.

Affiliate Marketing and Pay Per Click

By: Andrea Keats | 30/12/2009
Do you want to make more money? Do you want to turn that computer you spent so much money on into a cash cow? Well it is possible. It won’t happen overnight but with time and hard work you’ll soon be working from home if you choose.

Affiliate Marketing 101

By: Alexa Vaughn | 30/12/2009
Affiliate marketing programs are a great way to get income for your website, and a great introduction to e-commerce. The more people that drop by your website, the great your chance will be at creating an excellent income.

Affiliate Marketing

By: Toni Bennett | 30/12/2009
Affiliate marketing is the revenue sharing between online advertisers (and merchants) and online salespeople. Compensation and pay is based on performance measures, normally in the form of clicks, sales, and registrations.

Affiliate Marketing Options

By: Stephen Schulz | 30/12/2009
Have you been wanting to give your current job the shove for quite some time? Do you have the tune, take this job and shove it as your cell phone ring tone? Would you love to get into your own business but you’re afraid of the risk? Well the fears of risk are nothing to be laughed at. The vast majority of small businesses fail within the first year. There are a variety of reasons but the financial risk is incredibly high. To minimize the risk many look into the field of affiliate marketing.

Affiliate Marketing And Home Business

By: Rey Carl | 30/12/2009
Many of us dream of being our own bosses. The lure of big money and flexible work hours is quite attractive. However, many are afraid to venture out on their own. They fear that they do not have the capital required to get a business started or they don’t want to loose the security of their day job.

Affiliate Marketing Businesses VS Sole Ownership

By: Peter Carlson | 30/12/2009
Today, many of us want to back in our jobs and go to work for ourselves. However, the difference between those who want it and those that actually do it is staggering. Those that do make the attempt have two options open to them. Create their own sole proprietorship or create and affiliate marketing business. Both can be quite productive if they are successful.

Top 7 Dropshipper Disadvantages

By: Stephen Pope | 22/02/2007 | Management
Don't get me wrong; I love drop shipping too! However, I would be remiss in my duty if I didn't tell you about the pitfalls as well as the advantages of being a dropshipper. Here, then, are seven disadvantages of drop shipping. 1. Merchant Account Violation: The terms of your Internet...

Income Tax Returns Your Accountant Should Not File

By: Stephen Pope | 19/07/2006 | Advice
You've been feeling uneasy (perhaps even guilty) because you've failed to report your under the table business income. Perhaps you've never filed a tax return, even though you know you owe money.

Build And Maintain Websites For Profit

By: Stephen Pope | 18/07/2006 | Communication
Even with limited knowledge and experience, you can build and maintain websites for profit. Here are just some ways you can do so. 1.

Are Your Subscribers Receiving Your Newsletter?

By: Stephen Pope | 29/06/2006 | Communication
In my e-mail one day, I received the following message: "Hello, I am a subscriber to your ezine and received the attached e-mail. Please advise if this is actually from your website. Thank you." The attachment was from my mailing list program.

Alas! In E-commerce Taxland

By: Stephen Pope | 29/06/2006 | Communication
In trying to comply with tax laws for your e-business, you may find yourself falling down the rabbit-hole, going through the looking glass, and attending a Mad Tea-Party.

Top 7 Reasons To File Your Income Tax Returns On Time

By: Stephen Pope | 27/06/2006 | Advice
Here are seven reasons for not being late filing your income tax returns. 1. Avoid Late Filing Penalties Late filing can result in substantial and continuing penalties. This is in addition to any interest that is due. 2.

Drop Shipping Increases Profits

By: Stephen Pope | 27/06/2006 | Business
You would like to increase your income by selling other peoplesproducts but you just dont have the money to stock inventory.

Submit Your Articles Free: Signup
Article Categories




Use of this web site constitutes acceptance of the Terms Of Use and Privacy Policy | User published content is licensed under a Creative Commons License.
Copyright © 2005-2008 Free Articles by ArticlesBase.com, All rights reserved. (0.30, 8, w3)