Risky Business: Legal Checklist Final Chapter

You have probably seen the mayhem commercials for insurance. Mayhem is not your friend. We often go about running our little businesses without giving him much thought. Today is the day to consider what Mayhem could cost your business and perhaps your family.

I advise all of my small business clients to do a liability assessment every year. This is pretty easy but most people would just rather not think about the what ifs.

1. Drag out all your insurance policies.
     
      Is your inventory covered to be replaced if your home or place of business burns down?

      If you are creating your product in your home and using a torch does it void your homeowners  
      policy?

      What business activities do you need extra coverage for? Soldering, welding, glass fusing??

       Jewelry almost always requires additional insurance! You must find out exactly what your policy
       covers.

     How much liability coverage do I have and is it enough? Could I loose my home if I am sued.

2. Make a list of things that could result in a lawsuit.

      Someone injured on your property or in your store.

     Defective merchandise.

    An injury during a class.

     Are you giving warnings about dangers? Are students signing a liability waiver? This is a must!

     Did you know soldering with a torch destroys your retinas and the damage is cumulative? All
     persons soldering with a torch must wear didymium lenses to prevent damage. I bet your instructor
     did not mention that every time you use a torch you are risking your eyesight.

     An injury at an event or show- someone trips in your booth.

3. Research what permits you need and any laws that might regulate your business.

     Many cities limit the type of business you can run from home.
   
     How does California proposition 65 effect my products?

     What warnings must I post or give?

     What type of license or permit do I need?


Play the devils advocate and figure out all the things that could go horribly wrong. Now take steps to protect yourself. Insurance is not as expensive as you think and it is part of running your business and is necessary. Make insurance expenses a part of your financial business plan. I cannot afford insurance is not an excuse it simply means you need to tweak your business plan to realize a profit.

Don't be afraid to understand your potential liability. Knowledge is power. Safer, conservative business practices often mean higher profits long term. You can do this without all the risk!! This is just a partial list of all the things you need to consider but it is definitely enough to get you started! Go out there and realize your business dreams! You can do this!

XO,
Tara