Any business runs the risk of requiring protection when you have a large number of assets that can easily become damaged or stolen. You need a plan in place to protect these assets and to ensure that you do not face a large loss, especially when you have a small business. Now that the pandemic has affected so many businesses, you cannot run the risk of facing even more loss that is so unnecessary with the right protections in place. Continue reading below to learn more about how to keep the assets of your business safe from loss or damage.
1. Choose Your Type of Entity Wisely
When you first start your business, you have to choose a business entity that can range from an LLC, a corporation, or even a sole proprietorship. The type of entity that you choose is not just beneficial for taxation purposes, as it also affects your assets. The worst entity for the protection of your assets is to determine that you want to open your business as a sole proprietorship as your assets are eligible for a lawsuit. If you set up your business as an LLC or as a corporation, you are more likely to have a higher amount of protection for your assets.
2. Get the Right Insurance
Insurance is one of the first purchases that you should make as a business to protect your assets. If you rent your office space, for instance, make sure that you enroll in tenant insurance in Montreal to protect your office assets. If you own a retail store or an office building of your own, you will require a completely different type of insurance so make sure you are prepared. Either way, insurance assists you in overcoming any incidents that may occur at your business and will allow a lawsuit to occur against your insurance instead of you.
3. Follow All Procedures
Most ways that assets are lost when you own a business are if you do not follow the appropriate procedures. Be sure you read over the fine print of every contract that you sign and that you follow all instructions in the contracts. Ensure all titles for your company vehicles, for your large business goods, and for your office space are in the business name instead of your name. Only allow licensed professionals to work on your business, and avoid hiring a friend or a recommendation that works under the table.
4. Get Umbrella Insurance
You may already have tenant insurance, business insurance, or any other type of insurance at your place of business. Consider purchasing umbrella insurance that covers all of your other types of insurance policies and plans that you may have. It is expensive to purchase for your business, but it can protect you in most instances from the loss of your assets that may occur. Be warned, however, as umbrella insurance will not cover you if you are not following procedures, if your business choices are negligent, or if you are engaged in any criminal activity.
5. Use Your Spouse
The final way to protect both your business assets and your personal assets is to place some of the assets in the name of your spouse. If creditors were to put a lawsuit against you, they could not access any assets which are in your spouse’s name. Ensure that these assets are literally listed as a separate piece of property that only belongs to your spouse to gain this protection. If you do happen to face a divorce later on though, this can cause confusion so be careful with the choices you make.
In a year that has been full of economic loss, you do not want to run the risk of losing more or any of your business assets. Ensure that you have the right insurance policies in place to protect you from any lawsuits that may occur. Consider even investing in umbrella insurance that can cover your other insurance policies to give you the ultimate form of protection. Following these steps above will help you to maintain success and maintain certain financial security within your place of business, no matter the losses you have had.