Risk Management

It is critical to make certain your business and personal assets are adequately protected from unnecessary risks. Many business owners assume nothing will go wrong and ignore potential risks and other liabilities their business or personal assets might be exposed to. We help you understand these potential risks and explore possible risk management solutions.

Understanding Your Risk

As a rule of thumb, the more assets you or your business have, the more attractive you are to sue. Your industry plays a role as well... consider, for example, how frequently construction contractors are lawsuit targets compared to professors. This means that, in general, your risk management strategy should be proportional to the assets you or your business own while accounting for the industry you are engaged in. In determining what your overall risk is, you should be honest about your assets, your industry, and your habits.

Modifying Your Habits

Modifying your business habits often makes sense when minimizing your exposure to risk is the goal. For example, applying a basic knowledge of premises liability to the way you maintain your building and parking lot could save you thousands of dollars in lawsuit costs from a "slip and fall" accident. Knowing to never commingle personal and business accounts can protect you from a lawsuit seeking to "pierce the corporate veil" and hold you personally liable for business debts and obligations. Even understanding which questions you should and should not ask employees or interviewees makes a difference.

Entities & Insurance

If you are a business owner, one of the first things you can do to limit your risk exposure is make your business legally separate by organizing it into a corporation or LLC. This step creates a barrier between you and your business should any lawsuit-worthy event or debt obligation happen. If you own multiple properties or business departments, a possible strategy is to create a master "Series LLC" by placing each property or business interest into its own separate "mini" LLC, organized under the Series LLC. In effect, this strategy isolates each individual property or business interest and prevents debts, liabilities, or lawsuits from spreading to your other mini LLCs.

You should also cover your business with adequate insurance protection where it makes sense. This can include malpractice insurance if relevant to your industry, property insurance for business premises, and auto insurance for business vehicles, among other things. If your main asset is still your earning potential, a disability income insurance policy can protect your business, family, and lifestyle from hiccups like illnesses and accidents. If you are already a higher net worth business owner, an umbrella insurance policy can provide coverage beyond ordinary limits, shielding you from liability due to your greater assets.

While our firm is not directly engaged in all of these named strategies, we acknowledge the role they all play. We examine your risk management strategies where we are concerned and, in areas outside our scope, offer to either review what you have in place or, in some cases, refer you elsewhere as part of a holistic risk management strategy.