Virginia entrepreneurs tend to be focused on enhancing their income and growing their businesses. While these are great areas to focus your attention on, you also need to think about your liability risk. Lawsuits happen every single day to not only big corporations but also small businesses. It’s important to be prepared and help to mitigate your risk of being sued.
Start with having the right business entity
Business formation and planning sets the tone for your legal protection against future lawsuits. Certain business structures will allow business owners to relinquish liability for any of the business’s debts or liabilities due to a lawsuit. Most business owners looking to release their personal liability from the business will set up an LLC. It’s always advisable to speak to an attorney about which type of business entity is best for your individual situation.
Get insurance coverage
Insurance companies offer a multitude of different types of insurance policies for various types of businesses. One main type of insurance that any business should have is general liability insurance. You should speak with your insurance agent to determine which insurance policies are necessary for your business to help to protect your financial interest in the event of a lawsuit in the future.
Know employee pay rate laws
One of the most common types of lawsuits that businesses experience is from their employees. These are due to issues with compensation. Many employers don’t realize various legal aspects of compensation and end up violating employees’ rights without even realizing it. One common example is paying the federal minimum wage when the state minimum wage is actually listed as higher. Employees are entitled to the highest minimum wage specified by either federal, state or local governments.
It’s crucial for every small business owner to not just focus on enhancing their income but also mitigating the risks of a liability in the future. Financial liabilities can take a large chunk out of a business’s financial well-being. By utilizing the tips that we went over above, you can help to reduce your risk of being involved in a lawsuit in the future.
