We live in litigious times and it’s an unfortunate reality that you need to take steps to ensure your personal assets are protected from anything that may happen. It’s also unfortunate that there are rather a lot of ways in which you could be put in a situation where your assets could be a risk, so you need to know what some of these are and what you can do to mitigate the risk to your personal property.
Running a business
Running your own business can be immensely enjoyable and a good generator of wealth, but you should always be aware of what could go wrong. Whether it’s an injury to an employee or to a customer, theft from your premises or damage to company vehicles or machinery, you should always make sure that you have the right insurances in place.
Your business premises should always be insured for employers and personal liability, as well as taking out insurance to protect any business assets. It’s a fact that businesses do go bankrupt and you need to be certain that if it happens to your business you’d not be personally liable for creditors looking for money. If the business is set up correctly then you ought not to be personally liable for any debts.
However, if you run a small business, and you’ve taken out a loan uses one of your personal assets as collateral, you could lose that asset if you’re unable to repay the loan. So seek professional advice regarding what kinds of insurance can offer protection in such cases.
Protection in the home
We’d all like to sail through life with nothing major going wrong but, in the real world, that’s unlikely to happen. Everyone at some stage will encounter a problem that could impact them financially, and there are many unlucky people who have found themselves at the mercy of lawyers pursuing a claim against them.
The important thing to remember is that there are ways to ensure that your personal assets are not taken away by greedy lawyers, or that you don’t have to spend a lot of money for repairs to your property or to electrical or other items in the home.
As a property owner you should always insure the building so that if there is a problem — such as storm damage to the roof, or water damage from a leaking bath, shower, toilet, or frozen and cracked pipes — you’ll be covered by the appropriate policy. It’s essential to check what is and isn’t covered by your insurance so you’re clear about what you can and cannot claim.
A home warranty is one of the best solutions for protecting your electrical appliances and major home systems such as heating or air conditioning. This is a service agreement taken out for one year, and then renewable annually, that covers the replacement or repair of items that typically breakdown due to normal wear and tear. Appliances that you use daily are more likely to have a problem so it’s worth exploring the options for protecting them. Before deciding on which home warranty to take out it’s worth taking the time to read reviews to see what others think.
Legal protection
Litigation is costly and, if you’re on the receiving end, you could easily deplete your savings and, potentially, put your personal assets at risk if being taken and sold to bay legal bills. However, there is insurance available that will cover legal bills; it may be well worth considering because you never know when you may need it. For example, you could be responsible for an accident and be sued for damages. But if you have the right insurance in place, then the risk of you losing assets is significantly diminished.
Protect your future
Being aware of your potential liabilities is important for ensuring your future financial health. The good news is, if you’re willing to take a little time to analyze what you might need and put in place the most appropriate warranties and insurance, then there’s little reason to ever worry.
Photo Credit: Abi Skipp
I’d disagree with home warranties….especially the extended warranties that one seems to get asked about at almost every purchase of any electrical anything bought at a store.
I recall Sears & Roebuck used to be especially bad about it. We bought several major appliances (stove/etc) when we built our home, and by registering the original warranty, you were guaranteed to get a call from a Sears telemarketer near the end of that warranty period hawking an extended warranty.
One day they called, and asked how many other Sears products I owned….I listed quite a few, including a radial arm saw in my shop. “Well, sir, for the price of $$$ (don’t recall the amount now, but it was ridiculous), we can cover EVERY Sears product you own !” I gave it about 2 seconds thought, and began laughing…then told them “Mam…..I’ve have not spent that much on repairs to the stuff in 10 years…..I’m sure not going to give it to you for what ‘might’ happen in one”
And that sums it up….the stuff is sold mostly out of “fear of loss”…..if you were to really sit down and add up the cost of all those extended warranties, you’d see the ACTUAL losses you might suffer from time to time to be way below the cost of such insurance…..WHICH IS WHY THEY PUSH IT SO HARD…..highly profitable for them, mostly a loss for you.
Something you’d be far better off doing is buy some basic tools (ohm meter, hand tools, etc) and some appliance repair books (or YouTube these days) and learn to do many of your own repairs. THAT will put many, many thousands of dollars in your pocket over the years.
There’s serious financial risk in jurisdictions where contingency fee lawyers and activist judges seem to think it’s their calling to take from the “rich” (anybody with some net worth) and give it to the “poor”.
In West Virginia, there were a series of outrageous judgements in favor of individuals allegedly injured by natural hazards they encountered, while trespassing on West Virginia farms.
The citizenry completely reversed its governance, putting both house of its legislature in the hands of the opposition party, which, as a first order of business, passed statutes which make it much more difficult to pull off such travesties in future.
So, an additional tip: Be aware of the tort law climate in your state.