When something goes wrong, you don’t want your company to have to cover the cost. By finding a way to limit liability, you can deflect such costs. Below are just a few examples of how to limit business liability.
Change Your Company Structure
By looking into company registrations, it’s possible to change the legal structure of your business. This could allow you to set up your company as its own legal entity so that your business and personal life can be kept separate.
If you have personal debts and a debt collector comes round, having a limited company could prevent a debt collector from demanding funds or assets belonging to your business. This can ensure that your business stays afloat, even if you’re in a lot of personal debt.
Protect Yourself With Insurance
There are many disasters that you can insure your business against. This includes everything from fires to injury lawsuits. Without insurance, you have to pay for repairs and pay injury lawsuits out of your own pocket. Insurance can cover these costs and is therefore useful to have,
You can insure yourself against practically anything, but ideally only want to insure yourself against the biggest risks like injuries and natural disasters. Consider shopping around for different insurance schemes.
Put it in Writing
Written contracts can also help limit liability for their business by outlining what you will and won’t pay for if something goes wrong. For example, if you want to be absolutely clear that you do not accept refunds on a product, make sure that you put this in writing in the contract. If they have signed the contract, the liability is then on them.
You can also confirm things in writing over emails or even instant messages. So long as you have written proof that you and another party have agreed to something, you should be protected.
If a customer slips on a wet floor and there is no wet floor sign, they are perfectly entitled to sue – and they are likely to win. However, if you’ve placed a wet floor sign on the ground, a customer is going to find it harder to win their case.
This is why you should signpost all potential hazards no matter how obvious they may be – it could be an effective way to deflect lawsuits. This guide offers more information on health and safety signage in the workplace.
Outsource Tasks That Aren’t Your Strength
Trying to take on tasks that aren’t your strength could get you into trouble when things inevitably go wrong. It is better to outsource tasks that are not our specialism. This not only ensures that they get done to a high quality, but also helps to shift the responsibility if there is a problem.
For example, if you want to launch a food product but have no experience of manufacturing, it may make sense to outsource manufacturing. This manufacturing company can then be liable if anything goes wrong during the manufacturing process.