3 Ways to Protect Your Business Without Hiring a Lawyer


Dealing with potential legal issues can seem daunting, but ignoring them could bankrupt you.

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July 20, 2021

4 minutes to read

Opinions expressed by Contractor the contributors are theirs.

There are many benefits to being a business owner: controlling your schedule, unlimited earning potential, choosing projects that you really like. But there are also a lot of responsibilities. What if you do not understand the legal elements correctly? What steps should you take to protect yourself and your business? What can you do on your own and when should you hire a lawyer?

It can seem intimidating and overwhelming. But legal issues cannot be ignored, because one mistake can be enough to bankrupt you. The good news is that while hiring a lawyer is often the best option, there are some things you can do on your own without incurring high legal fees. Here are three.

1. Link your business bank account to your LLC

As a lawyer working with small business owners in New York City, I see this mistake time and time again. You go to the trouble of setting up an LLC, and you even go so far as to create a business bank account. But you are setting up the bank account under your Social Security number when it should be set up in your LLC’s Employee Identification Number (EIN). The LLC is intended to protect your personal property from the actions of your business. The only way to do this is for your business bank account to be linked to your LLC’s EIN, not your personal social security number. If you don’t have an EIN, you can get one by visiting www.irs.gov.

Related: 5 Mistakes That Are Sabotaging Your Business’s Bank Credit Rating

2. Take out business insurance

Insurance doesn’t solve all problems, but it can go a long way in reducing your out-of-pocket expenses if you run into legal issues. Lawsuits are expensive, even if you win. Businesses need commercial insurance because it helps cover the costs associated with property damage and liability claims. Without business insurance, you may have to pay out of pocket for damages and legal claims against your business. Depending on the incident, this could be a financially devastating scenario. Plus, insurance offers peace of mind, which cannot be underestimated when running a business. There are different types of insurance that business owners may need, including general liability, professional liability, and data breach. Talk to a broker about your options.

Related: 7 Types of Insurance You Need to Protect Your Business

3. Put legal notices on your website

Virtually all businesses today have a website. Could your website get you sued? The answer is yes! ”Even if you don’t slander anyone or post someone else’s work, what’s on your website or what is not on your website could get you into trouble. At a minimum, your website should have three legal notices posted where viewers can easily read and understand: a privacy policy, a disclaimer, and terms and conditions.

The privacy policy sets out what personal information you collect from visitors (such as emails and phone numbers) and what you do with it (use it for marketing or order fulfillment). This is required by law if you are actually collecting personal information from individuals, as protecting the privacy of individuals is an important interest of the government. A disclaimer is a legal notice placed on your website for the purpose of limiting your liability for the outcome of the use of your site. Does your site provide educational advice or information? Doing so could expose you to potential claims if someone trusts this information and gets a bad result. A disclaimer can reduce your liability if this happens. Finally, a terms and conditions notice is a way for you to set up rules and regulations for visitors using your website. It’s also a way to protect your business by limiting liability if a customer sues you. These three reviews are often displayed at the very bottom of your website, where people can click and read them.

Related: 5 Tips for a Better Website for Small Businesses

If it’s not in your budget to hire a lawyer to prepare them for you, there are templates online that are a good start. You can then have them reviewed by a lawyer licensed in your state, potentially for a lower price than if they had to prepare them for you from scratch.


About Leah Albert

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