Many small business owners put a lot on the line to be able to run a business on their own terms. However, one lawsuit against the business can be devastating on both a personal and professional level. If they are not careful, a business owner can lose their business, as well as their personal assets if they are sued. However, there are steps business owners can take to protect themselves as well as their businesses from liability.
Choose the right business structure
You have many options when it comes to choosing a business structure for your business. While a majority of U.S. small businesses are sole proprietorships, savvy business owners know that filing to become a limited liability corporation (LLC) offers significantly more legal protection. Specifically, an LLC separates your personal assets from the assets of the business, therefore ensuring that you are not personally liable if your business gets sued.
Get property and liability insurance for your business
Getting property and liability insurance to cover your business assets is an excellent way to insulate your business. While choosing the right business structure protects your personal assets, insurance protects the business itself. If someone files a lawsuit against your business, having insurance may be the one thing that keeps your business alive.
Consult with an attorney
An attorney specializing in business and commercial law can help make sure your business is compliant with all laws and protect your business from potential lawsuits. They have key insights into the business entities that would best serve your business and protect your assets.