When building a business, making it an LLC or limited liability corporation will help you protect your own assets while avoiding double taxation. Though these are good reasons to form an LLC, some owners believe that, because they’ve chosen such a corporate structure, they don’t have to worry about business insurance cost Birmingham AL. Below, you’ll find out why you should have business coverage, even with an LLC.
Protecting Your Company’s Assets
Generally, LLC formation protects your private assets from being seized to satisfy a company’s obligations. However, your business’ assets could be at risk for various reasons. If you lack general liability coverage and someone is hurt on your property, your company may be responsible for the cost of their injuries. If you or an employee makes a serious mistake that causes harm to a customer or someone else, your company could face a lawsuit, putting it at risk.
Your Personal Assets Aren’t Always Protected
There are some circumstances in which you can be held personally liable, even if you own an LLC. If you commingle your personal and business assets, or if you personally back a corporate loan, litigation against the company could put your private assets in jeopardy.
You May Incur Legal Costs, Even If You’re Not Held Liable
You can potentially be sued for just about anything, even if you’ve done nothing wrong. If you’re sued, you’ll have to hire an attorney, take time off from work, and you may even suffer reputational damage. To fully protect your private and corporate assets, you’ll need to determine the business insurance cost Birmingham AL.
Set Yourself Up for Success
Forming a limited liability corporation is a good way to protect your business and yourself from litigation. However, for complete protection, you’ll need professional and general liability insurance as well.
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