As a new business owner, your focus is on day-to-day operations and all that is necessary to turn a profit and make your company a success. You may consider certain aspects that could potentially go wrong but may also miss some aspects that could truly threaten the success of your business.
Below are four types of potential liabilities that could spell trouble for your entity:
1. Unsafe working conditions
The working environment you want to maintain for your employees is one that is safe and free from hazards that could cause them injury or even death. Making sure the working environment for your employees is as safe as possible is a good first step. Then, consider signing up for workers’ compensation insurance when you begin the hiring process.
2. Professional liabilities
Professional liabilities could be an issue you could encounter. Errors and omissions (E&O) insurance is a way to protect you from this potential. The policy would cover mistakes a professional might make or a failure to perform according to a contract. Seeking the guidance from a legal professional knowledgeable in business law regarding whether E&O insurance is right for you is advised.
3. Products that cause harm
Product liability may relate to the assembly of a product or the consumption of a product that causes injury to a consumer. Despite the care you and your workers take when it comes to quality assurance, you could face a lawsuit for the effects of an unforeseen harmful product. Although it will depend on your business model, you may want to consider an insurance policy that covers this kind of liability.
4. Financial struggles
Financial liabilities refer to mortgages, expenses, payments to suppliers and other obligations pertaining to running your business. This may be the most common type of issue you could face, especially in the wake of the uncertain economic climate. Before opening shop, consider going through each and every expense with a reserve cash flow in order to avoid financial hardship early on in the process.