If you’re a business owner, you have many assets that are specific to helping your company operate to the best of its ability. Some of these assets include things like commercial vehicles, machinery, equipment, buildings and overall legal liability. Unfortunately, if these are not fully protected with quality insurance and by taking the proper protective measures, you could lose them entirely. If a lawsuit ever occurs, every single thing that your business owns could be taken away from you in order to pay legal fees.
Which Assets Need Protecting?
Depending on the type of business that you operate, your commercial assets will vary. A restaurant owner will find that their cooking equipment and physical building are all part of the company’s property. For a mobile landscaping business, their mowers, machinery and trucks are all part of their commercial assets. If you do not protect your property, it could be taken away from you in the event that you’re hit with fines or lawsuits. If enough property is removed, this could result in the eventual closure of your business.
Choosing the Right Business Entity
The type of business entity that you choose will make a big difference when it comes to who’s liable for losses that occur as part of a lawsuit or fine. For example, if you’re a sole proprietorship, your personal assets can be taken away from you because they are looked at as part of the company that you own. This means that your home and car can be used to satisfy legal fees and debts. If you’re currently a sole proprietor, you may want to consider legally changing your business status to either an S corporation or an LLC.
Understanding the Need for Insurance
Insurance is an absolute necessity because it can protect you if something goes wrong within the workplace. For example, you may need to compare different commercial vehicle insurance options so that you can fully protect the trucks and vans that are used by your employees. You may want to have some type of coverage in the event that someone gets hurt when visiting your physical place of business. If something does happen, the insurance pays the victim for you rather than having to go to court and fight over potential payments and penalties.
Have the Right Contracts and Procedures
As an entrepreneur, you need to realize the power behind every contract that you create. Word-of-mouth does not hold up in court, and even written emails won’t have much substance if this is all you’re able to provide when being sued. No matter who you’re working with, you need to create a contract that is signed by both parties. This includes employees, contractors and even customers who may be making use of your services.
Keep Assets in Good Condition
Another simple, yet highly effective way to protect your company assets is to keep them in good condition. So, for example, a restaurant that has a lot of cooking equipment will find it to be financially beneficial to keep these machines in good working order so that they do not need to be replaced. You’ll find that this provides substantial monetary benefits over the years that you’re open.