Insights
Do You Know Your Business Liabilities?
Simply put, a business liability refers to legal obligations or responsibilities. Although usually perceived in a negative light, some types of liabilities are a normal and expected part of operating a business. Other types of liabilities are more abstract, unprecedented, and multi-faceted. No matter what type of business you own or are involved with, it is crucial that you know the liabilities of your business. At Black Lion Services, PLLC, we are attorneys that concentrate on providing legal risk audits to businesses of all types and sizes to be aware of any potential impediments and how to prevent them.
Typical Business Liabilities
Some of the most common business liabilities include:
- Employee wages owed
- Accounts payable
- Unearned revenues
- Bonds
- Pension obligations
- Mortgage debt
- Sales tax payable
- Bank loans
- Interest payable
Potential Legal Liabilities
A legal risk audit will help determine any potential legal liabilities and eliminate or minimize the risk of their occurring. While this is highly varied depending on the business in question, potential legal liabilities can include:
- Legal Non-Compliance: Businesses are required to stay up to date with existing laws, rules, and regulations and ensure they comply with them. Included in this is the failure to reform existing contracts to conform to new laws.
- Improper Protection of Private Information: As technology advances, so do the skills of hackers. If unauthorized parties access any confidential information your company is holding, the company is subject to litigation and/or hefty fines. It is essential to take all necessary precautions to protect this data and have a plan in place if it should be hacked.
- Non-Compliant Contracts: Contracts are the mainstay of most businesses. When they are properly drafted and executed, they dictate the terms by which all parties must comply and the repercussions of non-compliance. Potential pitfalls include ambiguous contracts, fail to describe goods or services properly, ignore governing laws, fail to adequately describe party responsibilities, and those that do not clearly define deadlines.
- Inadequate Governance of Employees: Employees that are not properly trained or protected can be a potential liability. An employee handbook can also help prevent claims of discrimination or harassment.
Advantages of Conducting a Legal Risk Assessment
- Improved communication with staff members as well as a better work culture
- The reduced potential of future litigation
- Enhancement of the quality of product or service offered
- Reduction in insurance premiums
- Acceleration of revenue
- Proper projection of future performance
- Increased productivity and efficiency
- Improvement in business practices
- Decrease in the possibility of reputational damage
Don’t Be Caught Unprepared
If you are a business owner or executive, you owe it to yourself, your employees, stakeholders, and clients to conduct a legal risk audit. When you contact Black Lion Services, we will schedule a confidential appointment to learn about your company’s history, focus, operations, and future goals. We will then explain how we can help you best reach your objectives while minimizing any potential liabilities.
April 21, 2021 Share This