Regularly assess ways to protect yourself and your business from damage.
Being a business owner means not only do you wear multiple hats, but you make challenging decisions every day that could have long-term effects on your business. As you continue driving your business’s growth, do you ever stop to think about the risks you’re taking on yourself? Are you aware that you could be held personally responsible for your business’s debts and liabilities? Learning about the personal risks you face as a business owner can help you to take action to protect yourself and your family against unexpected financial burdens.
Re-Evaluate Your Business Structure
As a starting point, ensure that your ownership structure is aligned with the level of personal risk you are prepared to take. If you are either a sole proprietor or a partner, you and your company are considered one entity, making you personally liable. However, if your company is incorporated, you’re a shareholder and legally speaking, a separate entity from the corporation. Therefore, an incorporated structure offers you a certain level of protection.
Be Aware of Your Personal Liabilities
Even as a corporation, you are not completely free of liability. There are still a number of ways that your assets could be in danger. If you took out a loan to get your business up and running, you have put your finances on the line, along with your home and investments. Additionally, using your own name on business contractors and mixing personal and business affairs could threaten your personal wealth. Maintain formal legal distinction by separating personal and business finances.
No matter what type of business you run, you’ll always need to secure appropriate insurance. The risks vary significantly, and you may find that you need several types of insurance to stay protected.
Protecting Your Personal Assets
When your net-worth grows, you become exposed to different personal risks. You may become a bigger target of litigation, for example. Consider securing coverage for liability for directions, personal injury lawsuits, and defense costs. Additionally, you’ll want to ensure that your properties, vehicles, and collections such as art and wine are appropriately insured.
Are you ready to get started on your tailored policy to suit your needs and business? At Nahai Insurance Services, we can help. Contact us today to learn more.