Legal liabilities can cripple a business with fees and can drastically reduce brand reputation. Therefore, taking preemptive action to protect your business from legal liabilities will reduce the risk of serious problems that can sabotage the entire venture.
This article provides practical steps to improve how your business is set up. Also, these steps are good business practices that you should follow to increase profitability, keep employees happy, and prevent distractions.
Hire a Business Lawyer
The first and arguably most important step toward protecting your business from legal liabilities is to hire a business lawyer. They are the best type of person to fully understand what legal liabilities might pose a risk to your business and offer the best solutions to overcome them. Without legal counsel, you’ll be in the dark about the nuances of the law.
Also, it’s a good idea to hire a lawyer with expertise in your industry. For example, if you have a plumbing business, it would help if your business lawyer had a few other clients from the plumbing industry. This ensures they can hit the ground running and understand the frequent liability problems that plumbing business owners have.
Business lawyers can help you get the best insurance deal and set up your business so legally, there are fewer reasons for anyone to make a legal claim.
However, knowing that you have an expert to turn to provide peace of mind when you do have legal trouble. That’s especially important for business owners that have a lot on their plate and need to outsource some of their responsibilities.
Avoid Losing Your Liability Coverage
One of the worst things that can happen is if a business loses its liability coverage. This can happen when your business practices are deemed unsafe. For example, if you don’t put in place good safety standards in factory or warehouse work, then insurers will not view this in a positive manner. This might cause your liability insurance to be revoked or become significantly more expensive.
Therefore, you should take steps to improve how your business is set up so that insurers can offer better liability coverage. Here are a few ways you can improve how your business is set up:
- Implement better sanitation procedures
- Place signs all over the workplace
- Offer employees better safety equipment
- Make sure that employees have a health and safety talk during induction and periodically
- Put all of this in writing and document the steps to provide proof for insurance companies
Also, don’t perform actions that can cause your business to lose liability coverage. For example, using company funds for personal expenses, providing guarantees that aren’t valid, and harming employees or consumers.
Get The Right Liability Coverage For Your Business
The goal is to get liability protection from the specific worst-case scenarios that can happen to your business. For example, if your business has a fleet of cars, you should get insurance for each vehicle should they be damaged beyond repair. This means your business would not lose money from unexpected repair costs. However, future liability coverage costs may increase.
Not sure what liability coverage is important for your business? Then speak with your business lawyer to get professional legal advice. Ideally, they should go through your business in detail and look for potential areas where legal problems could arise.
Acquiring the complete liability insurance package might cost more, but cutting corners could come back to haunt you. An insurance cost is predictable and allows you to plan for it, whereas unexpected legal costs from lack of insurance coverage can potentially bankrupt a business.
How to Choose the Best Legal Liability Insurance Company
A big part of getting legal liability insurance is finding a reputable provider. There are many options out there, and they all promise a great deal. Therefore, you need a framework for selecting a competitive company that matches your business well. Here are a few noteworthy ideas you should consider:
- Complete coverage: you must get coverage that protects your business from all types of legal liability. There can be no loopholes or gaps in the coverage, so you must read the fine print to determine what’s included. Not sure how to read an insurance coverage contract? Not a problem, you can ask your business lawyer to read it and provide advice if it’s a good match for your business.
- Price: part of running a profitable business is finding the best price for all input costs, which includes liability coverage. Therefore, you should find a competitively-priced insurance company that you can afford. You get what you pay for, so don’t look for the cheapest coverage if there is a lack of included protection.
- Good reputation: it’s important to find a transparent insurance company that will pay out insurance payments as agreed upon through the contract. Visit websites like Trustpilot and social media to learn more about what other customers are saying about the brand.
- Claims process: when you need to take advantage of insurance coverage, you should find a provider that offers a simple and fast claims process. You should expect some hurdles, such as submitting evidence and documentation, but it shouldn’t feel frustrating or intentionally difficult.
- Customer support: it’s important to have strong customer support if you need help making a claim or have questions about your insurance coverage. If an insurance company doesn’t invest in good customer service, it doesn’t reflect well on other parts of its business.
The tips above will help protect your business from legal liabilities, and it’s an important part of running a company. You should continue to monitor your business through the lens of potential liability problems. This will help avoid legal problems that could financially cripple your business.
Taking steps such as hiring a business lawyer, getting the right liability insurance, and taking steps to avoid losing coverage are the fundamentals you should implement right away.