Worried About Lawsuits? Here’s what you need to protect your assets …

With all the crazy economic, political, and potential recession in the news, the risks of being a business owner are more obvious.  Not only do we have potential cash flow and liability issues, but we must protect ourselves from the damages of a lawsuit, in case a relationship goes bad or we have a stretch of bad luck.

You likely need to different types of policies to protect you, your business, and your assets from lawsuits.  Many business owners only get one of the two — so be careful to get both if they apply to your situation.  

Business Insurance 

Business liability insurance pays for attorneys fees to defend you in a lawsuit (”duty to defend”) and damages due to harm caused by the business, such as a slip-and-fall, breach of contract, or an advertising dispute.  Most policies for small business owners will also include business automobile use coverage (your personal policy may not cover when you use your car for business), employees stealing from you, worker’s compensation, and property loss (computer being stolen, or office fire).  

Professional Liability or Errors & Omission Insurance

Even if you are incorporated, you may still be personally liable for your professional advice.  If the advice you give as a consultant or expert is allegedly negligent, you may be found personally liable for the damages resulting from your bad advice.  Also, as an officer of a corporation, you may be liable for the acts of the business of which you were a part, if you knew or should have known of the act.  Professional liability, or errors & omissions insurance, covers attorneys fees and damages due to your allegedly negligent acts.  

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