Owning a business means that you can open yourself up to varying types of claims from consumers and other businesses.
Ensuring that your business has the proper insurance coverage is ideal. Payouts for liability claims can bankrupt a small business if insurance coverage is not purchased.
A business can lose its liability coverage. Losing coverage with one company may cause difficulties in finding a new liability business insurance provider, leaving your business without coverage and financially responsible for any valid claims made against your business.
Examples of how liability coverage can be lost:
Using company funds for personal expenses
Intentionally harming your consumers, employees or other businesses
Providing guarantees that are not valid
Non-compliance with corporate regulations
You can prevent losing liability coverage by ensuring that you are providing the services that you promise, comply with corporate regulations and maintain a safe working environment. If you require company funds for personal matters, as the business owner, it is best to have a payroll check issued to yourself. This shows it as a valid expense.
If you are a partnership but are listed as a limited liability company or sole proprietorship, you can jeopardize your liability insurance coverage. There are different types and levels of insurance coverage available for each business type. If you only provide a single product or service, you may not require the same coverage that a large corporation requires. It is important to work with your company attorney to ensure that your business is properly classified and has the proper liability coverage.
While this may seem like common sense, some businesses do not have proper coverage for personal injury claims. If an employee, visitor or consumer is injured on your property by the fault of an employee, or other improperly maintained item the company is responsible for medical expenses and other fees. Ensure that your company’s liability insurance has personal injury claim coverage. This should cover accidents that happen inside, directly outside or as a result of a company’s actions.
Private property damage can occur during the delivery of goods or services to consumers and/or other businesses. This includes instances such as a vehicle accident, damaged buildings, and physical property. When driving is required for deliveries, or traveling to work-related events, accidents can happen due to an employee being distracted. It is best to train employees to focus while driving rather than answering a ringing cell phone or replying to a text message as any accident occurring from distracted driving leaves the company liable for injuries and damages.
As the business owner, you protect your company’s assets by having suitable liability coverage. If it is found that a member of the company, or the company as a whole, has been negligent it must take financial responsibility for the incident. It is important to cooperate throughout the whole process as your actions as the business owner reflect on the entire company.
A company attorney is always a necessity, regardless of the size of your business. The attorney should be with you from the pre-launch phase to help setup contracts, bank accounts, file documentation to operate and all other tasks associated with opening your business. The attorney should be contacted anytime there is a claim made against the business. The attorney should also be consulted anytime that a major change is planned for the business.
Changes include expansion, adding locations, adding products and becoming a global enterprise. The attorney’s job is to advise the business owner of the proper measures to take to ensure that potential company liabilities are properly covered, that the business is operating correctly and to ensure that proper business practices are being followed.
Small things like posting warning signs of wet floors, wet paint and other potential hazards is a good idea. Being a responsible business owner reflects on both you as a person and the business. It is vital that you have the necessary protections in place as you never know when an accident, natural disaster or injury could occur.
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NOTE: MEMBERS OF THE CHEF ALLIANCE ARE COVERED BY LIABILITY INSURANCE, WHICH IS INCLUDED IN THEIR MEMBERSHIP BENEFITS.
BACKGROUND: The Chef Alliance is a membership organisation for Personal Chefs, Private Chefs, Chefs and Caterers, Artisan and Cottage Industry food producers and bakers, Home Cooks, Culinary Instructors, Food Stylists, Chef Instructors and other foodservice professionals across Canada. We support our members in growing strong, successful businesses, through mentorship, peer support, marketing, business savings and liability insurance. We have member Chefs in Toronto, Mississauga, Hamilton, Burlington, Montreal, Quebec City, Vaughan, Markham, Ottawa, Vancouver, Victoria, Richmond, Calgary, Edmonton, Regina, Halifax... and many other towns and cities in Canada.
DISCLAIMER: INFORMATION PROVIDED MAY BE INCOMPLETE. THIS ARTICLE SHOULD NOT BE CONSIDERED A SUBSTITUTE FOR PROFESSIONAL, LEGAL OR FINANCIAL ADVICE. EACH BUSINESS SITUATION IS UNIQUE AND THE ADVICE PROVIDED IS INTENDED TO BE GENERAL. PLEASE CONTACT A LEGAL OR FINANCIAL PROFESSIONAL FOR ADVICE THAT IS BEST SUITED FOR YOUR BUSINESS AND TO MEET THE REQUIREMENTS OF YOUR LOCAL/REGIONAL GOVERNMENT LAWS AND BY-LAWS.