How to Protect your Business Assets

You have opened a new business and things are looking good. So, when is a good time to start thinking about asset protection? Answer: Immediately.

There are plenty of risks involved in owning and operating a business. With no guarantees in place, asset protection is essential. Some business owners may not think about the best ways in which to protect their assets, and simply buy more and more insurance. Others find themselves falling into the trap of being taken advantage of by high-priced asset protection promises that often have loopholes and do not end up delivering on promises.

It is no use crossing your fingers in the hope that an expensive lawsuit or unforeseen accident does not befall you, resulting in real danger to your business and assets. A classic example could be as simple (and unfortunate) as a client slipping on the way to your office and injuring themselves. Disgruntled customers or even employees can pose a hazard to your business and could result in expensive lawsuits

where you could potentially lose your accumulated business wealth, and even personal assets.

To avoid this, it is essential that you follow the right procedures in order to protect your business, and yourself. Here are four ways to ensure you and your business are properly protected:

Separate Assets

No matter how big or small your business is, it is imperative that you separate personal assets from business assets. While operating as a sole proprietorship may seem like the simplest option, particularly when you are starting out, it could result in the loss of personal wealth from business liabilities. The best thing to ensure this does not happen would be to establish a business entity such as a partnership or corporation so that your home, investments, and personal property are not exposed, should you be faced with a lawsuit.

Keep and maintain a separate chequebook for your business, use the company name on all documents, and maintain a corporate logbook so that you have company documents on hand for a lawyer to review in the event of something unexpected happening.

Speak to a tax professional or accountant about the best business entity for you, and ensure that you keep your work and personal finances separate. Invest in Proper Insurance

Some so-called “asset protection” companies may fool you into thinking that now you have invested in their services, you need not purchase insurance. Do not fall for this.

Insurance is an integral part of any business and should be carefully budgeted for from the start. When a physical or even digital asset is compromised in any way, having the correct insurance in place can minimise the impact of its loss and save you money. Ensure that you have the right insurance on all your assets, including homeowners insurance and automobile insurance. Unforeseen accidents can occur at any time and disaster strikes when we least expect it, so find a lawyer, review your current coverage, and do not underestimate the value of the correct insurance.

Secure Data

We all know how easy it is for data to be leaked. It is essential that businesses use confidentiality agreements and internal security measures to secure trade secrets and data.

Trade secrets from business practices and client lists to basic operations procedures are all part of what makes a business competitive in an industry. Securing these as much as possible is vital to protect your business assets.

Employee, third-party, and contractor confidentiality agreements and signed contracts, as well as security systems, encryptions, and password protection systems are important to invest in to keep vital business assets secure from pirates, hackers, or disloyal employees and contractors.

Proof is in the Paperwork

Being a stand-up business owner, and having proof of this, is essential and can make or break you when standing in front of a judge who is considering whether or not to go after your personal wealth.

One of the simplest ways for a creditor to attack your personal or business assets is to prove that you have acted negligently or fraudulently in your business. The ability to show that you have procedures in place to avoid accidents, documented minutes from meetings, and maintained honest and lawful interactions within your business will assure that you are a reputable business owner, thus making it more difficult for creditors to go after your assets.

No matter how secure you may feel, it is always best to be prepared. While these four, simple steps may just serve as a start to fully comprehensive asset protection, they are integral steps to consider. Consultation with a licensed attorney specialising in business planning and asset protection will enable you to grasp a more widespread understanding of the importance of being adequately covered.

When a physical or even digital asset is compromised in any way, having the correct insurance in place can minimise the impact of its loss and save you money.