When it comes to managing a business, there is far more than just worrying about managing a website, buying supplies, and serving customers – you also need to worry about liability.
There are multiple types of liability. From BusinessDictionary.com…
- Personal Liability – A financial obligation for which an individual is responsible and which may be satisfied out of his or her assets.
- Professional Liability – Legal obligations arising out of a professional’s errors, negligent acts, or omissions during the course of the practice of his or her craft.
- Product Liability – General liability or obligation of a producer (or supplier) of a good or service to make restitution for loss associated with its use, such as personal injury or property damage. Commonly, the aggrieved party does not have to prove that the producer (or supplier) was negligent because the fault is inherent to the item.
And how these liabilities are qualified…
- Strict Liability – In criminal law, strict liability is liability for which mens rea (Latin for “guilty mind”) does not have to be proven in relation to one or more elements comprising the actus reus (Latin for “guilty act”) although intention, recklessness or knowledge may be required in relation to other elements of the offense. The liability is said to be strict because defendants will be convicted even though they were genuinely ignorant of one or more factors that made their acts or omissions criminal. The defendants may therefore not be culpable in any real way, i.e. there is not even criminal negligence, the least blameworthy level of mens rea. For example, selling alcohol to a minor.
- Absolute Liability – To be convicted of an ordinary crime, in certain jurisdictions, a person must not only have committed a criminal action, but also have had a deliberate intention or guilty mind (mens rea). (Wikipedia)
“The difference between strict and absolute liability is whether the defence of a mistake of fact is available: in a crime of absolute liability, a mistake of fact is not a defence. Strict or Absolute Liability- also can arise from inherently dangerous activities or defective products that are likely to result in a harm to another, regardless of protection taken. Negligence is not required to be proven. Example: Owning a pet rattle snake.”(Wikipedia)
So how do you protect yourself?
- Obtain product liability insurance dependent upon the goods or services you provide.
- Trusted Choice Independent Insurance Agents: If you are an independent consultant for a direct-selling company, having this insurance can protect you from various incidences that may occur as a result of your business.
- Indie Business Network Insurance: If you are a manufacturer of handmade products such as candles, jewelry, cosmetics, lotion, soap, bath salts, perfume, essential oils, candles, jewelry, perfumes, fragrance oils, base oils, waxes, powders, masks and scrubs, you qualify for product liability insurance coverage through their program. They also offer a program for artisan made candy, cookies and other baked goods. Additionally, they offer programs for estheticians and for massage therapists. Insurance Customer Service at 844-520-6994 or firstname.lastname@example.org
- State Farm Small Business Insurance: The spectrum for this insurance is wider and it’s best if you speak directly with one of their representatives to see if they cover exactly what you need. This is especially good insurance if you own a brick-and-mortar store or have a facility/warehouse.
- Liberty Mutual Food & Beverage Insurance: If you manufacture your own food items, this type of insurance is a must to protect you from recalls, illnesses, etc.
- Obtain extended personal liability insurance. If you own or rent property, you have personal liability tied into that property, but this often will not cover you for your businesses expenses. Call and speak with your agent to see if your business is covered if you work-from-home.
- The Hartford offers General Personal Liability Insurance for businesses which can protect you from personal liability in the circumstance of an occurrence resulting from your business.
- Obtain professional liability insurance if your business relies on your expertise.
- The Insureon website allows you to search for your profession to sort through numerous types of insurance.
Obtaining a trademark/patent/copyright on your intellectual property can save you multitudes of headaches in the future. For most of these protections, they can become quite costly, so as a new business owner, you may want to pick-and-choose where to start. That being said, it’s best to protect yourself early on in your business to ensure you are covering your investment to avoid any future liabilities.
- A Trademark protects a name/brand/logo (or “service mark”).
- A Patent protects specific formulations and/or inventions.
- A Copyright protects original authorship.
The absolute best resource for this information is the United States Patent and Trademark Office.
III. Get a Lawyer or Legal Team
There is incalculable value to having a lawyer or legal team who can advise you as you pursue your business journey. Ideally, your legal team is authorized in your home state, is close enough in proximity to you for quick travel (in circumstances of litigation), and has a group of attorneys who are knowledgeable in various areas. If you have one lawyer, then he/she would have referring attornies dependent upon the needed area of expertise.
Disclaimers – The Vine Vendor Network is not affiliated with any of the aforementioned companies. We are not compensated for the above suggestions and are not to be held liable for any of the suggested companies’ actions, admissions, rejections, etc.. We recommend you always call and speak with a direct agent to learn if you and your business would be eligible for coverage.