It Protects Your Personal Assets in Case Your Business Gets Sued
Many entrepreneurs make the mistake of assuming an incorporated or limited liability business entity will protect their assets from unforeseen liabilities related to the business. But, actually, there is no corporate entity (e.g. LLC, C-Corp) that will completely protect you from bearing the costs related to a lawsuit. Small business owners are more susceptible to being held personally liable because they are seen as the face of the business, and have a high level of involvement in the operation of the business.
It’s Not as Expensive as You Think
Find a smart and trustworthy broker or agent that can recommend a cost-effective plan that matches your business profile. There are over 10 different types of insurance you can get to cover you against different activities related to your business. For instance, if you rent a property you’ll likely need to get property insurance. If you provide advisory services to clients, you’ll likely need to get professional liability insurance protecting you from damages for failure to or improperly rendering professional services. Get in touch with an insurance expert to ensure you don’t overpay for unnecessary protections and get a plan that protects you from the largest areas of liability risk. If you don’t have anyone in mind, email us and we will be more than happy to refer you to someone.
Smart Investors Will Love You For It
Moreover: it can even lower your cost of capital!
The last thing an investor wants is for you to lose your shirt because you’re not covered by insurance. In particular, banks may give you a cheaper loan if they feel you can cover business debt payments even if there is a work stoppage or an unforeseen liability that puts your business assets at risk.
