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What steps can I take to protect myself from liability as a business owner in California?

Picture of Chris Battis By   ·  1 minute read

As a business owner in California, there are several steps you can take to protect yourself from liability:

  1. Incorporate your business: By incorporating your business, you can limit your personal liability for the actions of the business. If your business is sued, your personal assets will be protected. You can choose to form either a Corporation or a Limited Liability Company (LLC). Both of these types of entities offer limited liability protection to their owners.
  2. Obtain insurance: You should obtain general liability insurance to protect your business from claims made by third parties. This insurance will cover your legal defense costs and any damages that you may be required to pay if a claim is successful.
  3. Follow all relevant laws and regulations: Ensure that your business is complying with all relevant laws and regulations governing your industry. You should also consult with an attorney to make sure that you are meeting all licensing and permit requirements.
  4. Draft and enforce contracts: Ensure that all contracts with customers, suppliers, and employees are in writing and clearly outline the responsibilities and obligations of each party. Ensure that these contracts are enforceable and are adhered to by all parties.

Limitations or exceptions to the advice provided include:

  1. Incorporation will not protect you from personal liability in the case of fraud or illegal activity. You will still be held personally liable for any illegal actions you take.
  2. Insurance will not cover intentional or malicious acts committed by you or your employees.

Suggestions for further action include:

  1. Seek the advice of an attorney: Consult with an attorney who specializes in business law to ensure that you have adequately protected yourself.
  2. Continuously assess risks: Perform regular risk assessments to identify potential hazards to your business and take measures to mitigate those risks.

In conclusion, protecting yourself from liability as a business owner in California involves several steps, including incorporation, obtaining insurance, following all relevant laws and regulations, and drafting and enforcing contracts. It is important to note any limitations or exceptions to these steps and seek further advice as necessary.