How to protect yourself and your business from lawsuits
Taking
the step to start your own business can be rewarding, but it also comes
with risks. Make sure your business plan accounts for liability. How
can you protect yourself and your business from being sued?
Incorporating isn’t free. Depending on where you live, just filing the articles of incorporation. If you hire an attorney, you could also pay some pretty hefty fees there too.
Another
option is to insure. There are two main insurance options, product
liability and professional liability insurance. Product liability
insurance covers damage your product may cause. “If you sew dresses and
leave a needle in a dress that harms a child, product liability protects
you,” said Wright.
Professional
liability insurance covers damage your service may do, like if you’re a
hairdresser for a celebrity and you make a major error. Professional
liability insurance is the same type of insurance doctors call
malpractice. It can cover negligence, errors or omissions.
The cost of insuring your business depends greatly on what kind of product or service you provide.
You
can be both incorporated and insured. Low-liability businesses, such as
making handbags or hair bows, Wright says, are safe to operate as sole proprietors since there’s a low probability you could get sued.
I hope this information help you in your research.
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