Small Businesses Can Avoid Bankruptcy From Legal Expenses
If you control your own business, even a home based business, you probably should carry some legal insurance in addition to what your existing business, auto and homeowner or renter policies encompass. Your coverage on these policies might not cover legal services needed for such situations as false arrest, libel, slander, or invasion of privacy.
The growing complexities of the legal system trigger the escalation in the costs of lawsuits. This can be extremely expensive to a small business owner, especially if you have a work at home business. You basically cannot afford to hope that you will never be mixed up in an expensive legal conflict.
Hiring an attorney to defend some claims against you or your business may destroy a small business. With money so tight these days, what small business owner can find the money to pay a minimum of $200 per hour for a lawyer specializing in business law? Unless you are running a million dollar business, this kind of help is beyond the reach of nearly everyone.
A couple of options are available to you.
First, talk with with your insurance agent to determine what additional policies or riders you can get that may cover legal costs for standard legal actions arising out of the customary course of business. You might be able to get an umbrella plan that will extend both the dollar limits of your current coverage as well as increase the number of matters covered. An umbrella plan can be an inexpensive solution to your legal exposure.
A second choice is a prepaid legal plan that protects you and your family as well as your business. Typically, for a set monthly or annual fee your will qualify for a collection of legal services that are customized to the demands of a small business.
One widely used and useful aspect of a prepaid legal plan is your ability to have phone conversations with your attorney. You can discuss possible issues with your attorney and get his or her legal recommendation before you do something that could produce a lawsuit. This is a positive aspect of most plans and can help you avoid lawsuits, saving you a lot of time, energy, and worry.
Most prepaid legal plans also include your attorney’s time for reviewing standard documents and contracts. Without a legal plan you might not think to have contracts reviewed. But, your attorney can propose ways to enhance the contract language and call your attention to potential issues. This as well can save you from plenty of headaches.
Prepaid legal plans will also cover your attorney’s time for preparing for and conducting a trial, should a legal situation require a trial. Probably your plan details the particular types of legal matters that are covered for trail related assistance.
Typical of any legal agreement, you ought to read over any prepaid legal plan cautiously to note accurately what services are included as well as their limits. You do not want to think you have broad coverage when your coverage is very limited.
Many plans also provide reduced fees for services not specifically made available by the plan.
You also ought to be concerned about the choices you will have for your attorney or law firm. After all, legal specialization and experience play a significant part in your legal standing,. Scrutinize the choices and ask each potential firm for references from prior clients. If you know other small business owners who have used a particular plan, talk about their experiences with them to find out their evaluation of the law firm they are working with.
You ought to in addition check with your state’s Bar Association and the Better Business Bureau to find the background of the attorneys and find out if there are some complaints, including fee disputes, against the firms. Check such items as your prospective attorney’s educational background, experience, and length of time practicing in his or her specialty.
Also, find out about how disputes with your legal plan provider are handled. See if they deal with disputes internally or present them to an impartial third party for resolution. This could have a big effect on your dealings with your plan provider.
Overall, as a small business proprietor, you should consider the likelihood of legal actions against you and make preparations to handle those situations. You will rest easier and perhaps avoid some pretty big expenses in the process.
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