Owning your own business can be both challenging and profitable and also provides people with the opportunity to pass something on to their loved ones. Litigation, however, can quickly reduce the value of a business and in some cases, lead to the loss of the business itself. Fortunately, there are steps that business owners can take to help protect their assets, so if you own a business and have questions about how to protect it from lawsuits, you should speak with Alan G. Orlowsky, an experienced Chicago business law attorney who can advise you.
Choosing the Right Business Structure
It is important for business owners to separate their personal assets from those of their business, as failing to do so can result in an owner leaving him or herself open to claims against personal assets. One of the best ways to avoid this and to keep one’s business and personal matters separate is to create the proper business structure that provides liability protection, such as:
Another way to limit the possibility that a business owner will be held personally liable for a business-related lawsuit is to create a trust and then place that company’s assets in that trust. In these cases, when a trust that owns a business is sued, the only assets that can actually be attacked in court are those that are also contained in the trust. For help determining which, if any, of these structures could help in protecting your business from lawsuits, please call our office today.
Obtaining Insurance
Although obtaining insurance won’t guarantee that a company won’t be sued, it can go a long way towards helping businesses cover legal fees and liability costs. There is also a wide range of policies that are offered to business owners, but most choose some type of general liability insurance, which protects against employee lawsuits. Other business owners, on the other hand, may opt for error and omissions insurance, which protects business owners from lawsuits filed by dissatisfied clients.
Drafting Legal Contracts
Regardless of their size, businesses should also consider using legal contracts when dealing with other individuals or companies, as these agreements can help protect a company’s interests in the event of a lawsuit. It is important, for instance, to define the specific services offered to a customer to reduce the chances of legal disputes. Copies of legal documentation can help prove that each party knew what was expected of him or her and that those involved had reached a binding agreement. In fact, business owners can even build liability protection into their contracts.
Consult a Business Law Attorney for Guidance
To speak with an experienced business law attorney about the best way to protect your own business from litigation, please reach out to the experienced Chicagoland business law attorneys at Orlowsky & Wilson, Ltd. Attorneys at Law by calling 847-325-5559 today.
