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Running a business takes hard work and dedication. You’ve poured your heart and soul into establishing your company, and it’s finally paying off. You may be feeling invincible! But, beware: as a business owner, you are responsible for protecting your company from liability and income loss. Here are some ways to do that.
In business, there is no failure except from not trying. That’s why you want to protect yourself from the worst-case scenarios by doing everything you can to make sure your business is protected against the things that could go wrong. If you don’t take measures to protect yourself, someone else will – but they will most likely charge you a lot of money for the privilege.
What is business liability?
Liability is one of the biggest risks that all businesses face. You can provide protection against potential harm to your company by taking the right precautions, like hiring a lawyer who specializes in business law.
There are many ways liability can impact your business, but the most common is through lawsuits. If someone were to sue your company for any number of reasons, they could very well be awarded damages, which could significantly impact your income and ability to grow your company.
Some common business liability risks include:
- Safety hazards
- Payroll issues
- Contractual disputes
- Discrimination suits
How can you protect your business from liability risks?
The most important thing you can do to protect your business is to make sure you are properly insured. You need to make sure your business is covered against many different things, like damage (fire, flooding, vandalism), income protection insurance, and mitigating liability risks to avoid lawsuits.
You should have a business attorney or insurance agent who specializes in business law to help you understand your liability risks and how to protect your business from them. They can help you to evaluate your insurance needs and areas of your business that can be prone to liability.
It’s also important to note that it’s not just about protecting yourself but also doing what you can to protect your employees and customers as well. For example, if someone slips on a wet floor in your store, an injury could be sustained. In order to prevent these accidents from happening in the first place, take measures such as installing a proper anti-slip matting system at entrances or exits within your retail space to keep people safe.
What is income insurance for business owners?
Income insurance is a type of commercial coverage for businesses that operate with a significant risk of interruption to their business. When these risks do happen, business income insurance can provide the funds necessary for a company to get back on its feet.
Income insurance policies are designed to protect your income and business assets from the risk of loss. There is no one-size-fits-all policy, but typically they protect you from lost revenue due to business interruptions.
Business interruptions are typically the result of disasters that cause your business to shut down, such as fire, flood, or other natural disasters. Your income insurance will generate a stream of revenue that you can use to pay your bills while your business is unable to operate, as well as cover the cost of employee wages and other costs.
How income insurance can protect your business from bankruptcy.
Businesses can purchase this type of policy as part of a broader commercial insurance package or as an independent policy – oftentimes it is packaged with other types of coverage such as property casualty, general liability, workers compensation, etc.
For example, imagine you are a restaurant owner, and your kitchen burns down due to a faulty electrical outlet. You lose your entire inventory and need to shut down your restaurant for at least 6 months while you rebuild.
Depending on your policy, the income insurance would cover several months of lost income, both for yourself and your employees, so that the hardship of lost revenue and wages are mitigated.
You may also like: Factors to Consider When Choosing Small Business Insurance
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