It is critical that your business has adequate insurance coverage. Without proper coverage, it may not be possible to pay damages to a customer who has been hurt without bankrupting the company. The same could be true your business had to pay another company for trademark or patent infringement. What are some other good reasons to have insurance?
Something Bad Will Happen Eventually
While you can’t predict when an emergency will take place, you know that one will occur at some point. Therefore, it is better to contact a commercial insurance provider Birmingham AL as soon as possible. In fact, it may be a good idea to do so during the business planning and formation process. Even if you don’t buy a policy right away, it will help you learn more about what you may need to buy and how much it could cost.
Protect Your Personal Assets
Buying a policy from a commercial insurance provider Birmingham AL may help to protect your personal assets in the aftermath of a lawsuit. While it may be possible to minimize losses by forming a limited liability company (LLC), a court still has the right to hold you financially responsible for an incident. This is known as piercing the corporate veil.
An insurance policy may be the only way to fully ensure that your home, car or other possessions aren’t liquidated as the result of a problem with your company. Remember, if your company does file for bankruptcy, any personal assets that were used to guarantee a loan could be sold by the trustee.
Therefore, filing for bankruptcy protection may not be a clear path out of financial trouble. Ultimately, it is better to have an insurance company that is ready to pay out a claim on your behalf than risk having to do so yourself.
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