Small businesses have an incentive to protect their investments and assets, but there needs to be a distinction between personal and business property. Starting out, a sole proprietor might use personal assets within the business, but this arrangement will be risky going into the future.

Seeking Asset Protection

Business asset protection starts by using insurance. Policies exist for specific assets, such as vehicles, machines, and personnel, but sometimes an issue slips through the cracks and isn’t covered by a particular item’s insurance. A blanket insurance policy, known as an umbrella policy, should be able to cover problems that don’t make sense to cover otherwise.

Seeking Proper Corporate Structure

When businesses start out, it could be advantageous to use personal equipment to get the ball rolling. In this scenario, the business owner is liable for damages caused by their personal equipment.

For instance, a landscaping company could run into an air conditioner with its lawnmower. If the landscaper is using his own equipment and does not carry liability insurance, he is responsible for paying this damage out of pocket.

With proper insurance and asset protection, the landscaper’s insurance would pay the claim instead of forcing the owner to come out of pocket. Having proper protections in place could be the difference between enduring for years or being forced out of business early.