The Next Step in Protecting Your Corporation

Mon, Jun 3, 2013

Financial Advice

When you own a business you know that having it incorporated is just the beginning of assuming the responsibility of protecting it. While businesses owners are not liable for things that go wrong for the company, there are some extra steps needed to legally protect your business and assets.

Get Catch-all Legal Protection

Living in a litigious society means protecting yourself and your business from every angle. That’s what General Liability insurance is for. This is for people who have a physical business property, such as a store. If someone is physically hurt on your property, having the right insurance protects you from massive legal fees that come with defending your business. It can also protect your libel, slander, copyright infringement.

Protect Yourself Professionally

For businesses that are based on a certified profession such as law or mental health, having Professional Liability insurance is a must. Having an LLC covers only so much and if you are running a professional practice, you’ll need errors and omissions coverage that Professional Liability Insurance provides. For example, if a client feels that you were negligent in any way, she could sue for malpractice. Having this kind of insurance protects you from hefty lawsuits whereas without it, you’d be responsible for tackling all aspects of the claim on your own.

Protecting Your Business from Your Products

Every business wants its products to be the best for everyone; that’s not always the case. If you are in the business of manufacturing or distribution of products then Product Liability Insurance is mandatory. You and your business need to be protected from potential injury and accident claims that arise from use of your products. This type of insurance is not just for automotive industry companies. It’s for any physical product that is consumed by the public.

Directors and Officers Insurance

Depending on the structure of your company, you may have a board of directors or a list of executive officers with vested interest in your company’s well-being. If the company is big enough, have Directors and Officers (D&O) insurance makes sense. Because these members are representatives of the company, their actions could negatively impact the company’s profitability or operations. If something was said or done to elicit legal action, the whole needs to be protected from the actions of one. This type of insurance covers costs, damages, and other losses. In many ways, D&O is a lot like Professional Liability Insurance because it has a variation of errors and omissions. Despite being comprehensive, this type of policy does not cover any intentionally illegal actions.

Insurance is one of the areas that strives to keep pace with the current times. In many cases, businesses of any size may cover data breach. Cybercrime and fraud is more rampant and more sophisticated. According to SBA.gov, businesses with less than 100 employees have higher rates of fraud and cybercrime in the form of credit card abuse. While it pays to do the due diligence of owning a business that deals with sensitive data, it may be wise to also invest in adding this type of line items to existing policies just in case.

 

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One Response to “The Next Step in Protecting Your Corporation”

  1. Simon @ Modest Money Says:

    Well, I can agree with you that thoroughly protecting your business is crucial, not only for its “survival” in case of anything but also for your peace of mind as the proprietor. At the end of the day…having the right insurance cover for your business is pretty much what you need.
    Simon @ Modest Money´s last blog post ..How to Calculate the True Cost of Owning a Car

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