Despite your best efforts, sometimes, misfortune can happen in the blink of an eye. A grudge, a misgiving, an accident, a wrong turn; something can suddenly go wrong. When that happens, your business is left at the mercy of a loaded gun. Will they pull the trigger? They most certainly will. Will you be able to do anything about it? Not on the spot, no; however, if you’d planned for this moment beforehand, then you’ll be able to save the situation. Instead of waiting until it’s too late to do anything, here are 3 sure and effective ways you can protect your assets when things go wrong. (Image Credit: Steve Buissinne /Pixabay)
Choose the Right Business Entity
First things first, the business entity you choose is going to play the first line of defense if, or when, the worst-case scenario happens. Operating a business on sole proprietorship is akin to non-existence; if the business becomes liable or if there’s a litigation, you’ll be personally liable as well and you’ll be at risk of losing your personal assets. It’d be much wiser to choose an LLC or a corporate structure. While both have their own pros and cons, as well as their shortcomings, they’ll do a great job of shielding your personal assets.
Offshore Asset Protection
However, even a fortified legal structure can sometimes fail to protect your personal assets. That can easily happen in case you’re personally sued for wrongdoings or for personal injury. In such a difficult situation, strategies like seeking offshore asset protection can be a life savior. The tax professionals at Silver Tax Group explain in their blog post: Strategies and Trusts: 6 Reasons Offshore Asset Protection Works how offshore asset protection works and why it’s wise to adopt this strategy. While it may be a costly and exhaustive process, this strategy is one of the most effective ways to protect your assets by remotely placing them away from any possible lawsuits and liability.
Getting Appropriate Insurance
What many business owners fail to realize is that protecting your assets isn’t a substitute for insurance or vice versa. You’ve got to have a business leader mindset to succeed. These two strategies serve in complementing each other, with each having their own role in protecting your assets. While you can hide or protect your assets using several strategies, having insurance will provide you the coverage you need in multiple scenarios. As a rule of thumb, most businesses would be all set after getting general liability insurance and workers’ compensation. However, depending on your line of business, you might need additional forms of insurance. For instance, a transportation company may need a vehicle and driver insurance, even getting cargo insurance can be necessary at times to protect against theft and acts of vandalism. Without insurance, you’ll be forced to pay for the damage and losses through your company or your personal assets or face the risk of becoming liable.
In the world of business, you can never be too prepared. You need to maintain constant vigilance and be safe rather than sorry at any given time. Since you’ll never be able to take the necessary action after facing the disaster, your preparation starts long before the disaster takes place. Preparing for the worst then means protecting your assets smartly, which can be done by choosing the right business entity, offshore asset protection, and getting the appropriate insurance.