Question:
What are the three fundamental ways you can protect yourself personally when doing business?
Answer:
Use the three lines of defense!
1. Contracts
You should always have a contract in place with anyone you exchange money or services with. These are going to be your customers, clients, people you subcontract, and people you work with (like your lawyers). You’re basically going to want to have a contract in place with anybody that you’re paying money to or giving services/products to.
2. Insurance
You should have a good, general commercial liability policy covering the type of work you do. In the event the contract is breached or someone doesn’t follow the contract, insurance will step in.
3. Business Entity
It’s good to have a business entity in place such as an LLC or corporation. You should have this in place as a final line of defense that will protect your personal assets from liability that arises out of the business that you’re doing.
To Wrap Things Up….
The three lines of defense are contracts, insurance, and business entity. By using the three lines of defense, you should be able to protect yourself personally when doing business.
Have any more questions? Feel free to reach out to our team at bertie@inbetterwetrust.com. We’re happy to answer any questions you may have!