If My Business is Sued, is My Personal Property at Risk?
Launching your start-up is a stressful and challenging task jam-packed with difficult yet necessary decisions. More often than not, businesses find it difficult to separate their personal lives from their business life.
But here's the thing; it's vital you keep your personal assets away from your business assets. In fact, asset protection helps ensure your personal property and wealth isn’t at risk because of business liabilities. In turn, both you and your business are likely to face great losses.
Despite this threat, small and major business managers overlook this essential aspect. In order to ensure a business lawsuit doesn't adversely affect your personal assets, you need to keep them adequately secured. Here we discuss some of the easiest ways you can protect your personal property:
Will my Personal Assets Also be at Risk if my Business Sued?
If someone is suing your business your business, chances are, your palms are sweaty, your hands are shaking, and your heart is racing. And if the prospect of your business being sued isn't horrible enough, you have to worry about your personal assets as well.
While all your best efforts and hard work are at risk of going to waste, your family and personal assets are also liable to coming completely undone. Now depending on your business structure and insurance coverage, your personal property may or may not be at risk.
Ways You Can Protect Your Personal Property
There's a wide variety of different ways you can protect your property. Here we've compiled top tips that help secure your property:
Select a business structure that matches your business's needs. Choosing the right business structure can affect your company's expansion, payable amount of tax, legal requirements, and paperwork.
Make sure there's a clear line between your personal finances and your business finances. In fact, make sure you use separate bank accounts and checkbooks.
Craft accurate and clear contracts to limit your liability and protect your personal assets.
Insurance offers business relief in case of an incident. Thus, it's critical you add the ideal business insurance to your budget. Carefully review your chosen policy to make sure it meets your business's unique type.
How an Attorney Can Help
While it's completely normal for you to feel stressed, overwhelmed, and upset, you need to remember your business's reputation is at stake. The lawsuit may be by vendors, employees, clients, or a competitor business. Moreover, the lawsuit itself may vary from discrimination in the workplace to breach of contract.
Regardless of the lawsuit, your first step should always be calling your attorney. Here you and your attorney will start reviewing the case at hand. From ensuring you have accurate records to preserving the relevant data, you and your attorney will overlook documents and electronic material.
Next comes informing your insurance provider that you're being sued—the reason being that several different insurance policies exist to provide coverage in case of lawsuits.
Now it's time for you to plan your response to the lawsuit and hire an adept and well-versed defense attorney to help you win the case.