As a business owner, it’s essential to understand the legal issues that you may face. Not only can some issues be time-consuming and admin-heavy, but they can also result in significant financial losses. Many entrepreneurs focus, and excel at, coming up with solutions to historic problems, or injecting energy into their organisations to achieve great things.
Considering things like insurance and the risks that might threaten the business isn’t always the most enjoyable of topics, but it does pay major dividends for those moments any business owner dreads, but hopefully can foresee. Here, we’ll explore the typical legal challenges encountered by entrepreneurs.
Insurance for Accidents
One of the most important aspects of running a business is ensuring that you have adequate insurance coverage for injury claims. Types of injury claims can range from basic slips, trips and falls to product liability cases where something you’ve produced results in direct injury to another.
You need to consider the common risks, first. For example, ‘slips and trips’ are the most common cause of injury in UK workplaces – over 29% of all non-fatal injuries reported in 2019 fell under this definition. It’s important to note that even if a business takes every precaution to prevent accidents, accidents can still happen, and without insurance coverage, the financial cost of covering compensation and legal fees can be extensive and stretch over extended periods of time.
Premises and Contents Insurance
Another legal issue that business owners should be aware of is insurance coverage for their premises. Whether you own or lease a property, it’s essential to have insurance coverage for potential damages or loss. For example, in the case of a fire or flood, a business could lose inventory or face significant damage to the building.
Not only does this put ordinary sales operations in question, but you’re also fronting up costs for new inventory, too. Without insurance coverage, the cost of repairs and stock losses could be substantial, if not virtually spell the end of your cash flow.
Paying Tax and Employing Others
Other common legal issues that business owners may face include tax law, contract disputes, and employment law. Tax law can be complex and time-consuming to navigate, with the risk of financial penalties for non-compliance. Contractual disputes can arise with vendors, clients, or employees, and can be costly to resolve.
Employment law covers a broad range of issues, including discrimination, harassment, and wrongful termination, which can result in legal action against a business. Due to the breadth of laws, it’s often recommended that you refer to a lawyer for advice on what to consider when hiring new staff or working with contracts.
It’s absolutely essential for business owners to understand the legal issues they may face and to take steps to protect their ventures. The reality is that because insurance is there for those unexpected moments, there isn’t a ‘right’ time to purchase some. It’s about foreseeing high risks and being proactive about managing those risks.
