Safeguarding Your Business: Strategies for Liability Protection
Learn essential aspects of protecting your business's legal liabilities by understanding types of liability, forming and maintaining entities like LLCs, obtaining insurance coverage, and using contracts effectively to limit liability risks. Explore key concepts such as two types of liability, entity structures, insurance policies, and contract provisions that can help safeguard your business. Note the importance of seeking legal advice for individual situations.
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Presentation Transcript
setting up a business that protects you Allie Moore of Creatives Learn Law for CBCA
The Plan Types of liability Understanding Entities Forming and Maintaining an LLC Insurance Basics Using Contracts to Limit Liability
Disclaimer This presentation is intended for educational purposes. This presentation should not be considered a substitute for legal advice and I can t give advice specific to any individual situation during this presentation. If you need advice, consult with an attorney.
Two Types of Liability Contract There s an underlying agreement and someone is alleging a breach. Damages are typically more limited, especially for artists and creatives. Tort Injuries. Can be to people or to property. Doesn t have to be physical injury. Data breach can be the basis of a tort claim. Damages can be very, very expensive.
Limited Liability Entities Understanding when liability is (and is not) limited. LLC Formation: Articles of organization, $50 filing fee Operating agreement recommended Maintenance: Periodic report, $10, once a year Keep finances separate Sign agreements on behalf of your LLC Corporations and nonprofit corporations Same liability protection, more maintenance and gove
Types of Liability Policies General Commercial Liability Often called slip, trip, and fall coverage Professional - Errors and Omissions Malpractice insurance, policies that cover you when you fail to deliver for a client. Other policies Examples include Electronic Media, Employers Liability, Worker s Comp, Tools & Equipment
Contract Provisions that Limit Liability Liquidated damages (for contract liability) Only enforceable if: The parties clearly intend it. It s a reasonable estimate of actual damages. At the time you enter the contract it s difficult to predict how much a breach would cost.
Contract Provisions that Limit Liability Liquidated Damages Sample Clauses: If the Buyer breaches this Agreement, Seller shall have the right to terminate this Agreement and shall be entitled to retain all or a portion of the Earnest Money and Construction Deposit as liquidated damages. In the event the Client is dissatisfied with the Photographer s performance of obligations contained in this Contract and claims any breach of the Contract, the maximum amount the Client can recover from the Photographer in any suit is the Contract price as set forth above.
Contract Provisions that Limit Liability Indemnification One party to the contract steps in to cover another party in case of a third party claim. Liability waiver One party to a contract agrees not to hold the other responsible for things that go wrong because of negligence.
Contract Provisions that Limit Liability Indemnification Sample Clause Client agrees to defend, indemnify and hold harmless Consultant from and against any and all Claims made by third-parties arising out of or relating to Consultant s use of any Client Materials in accordance with instructions from Client.
Contract Provisions that Limit Liability Liability Waiver Sample Clause: COVID-19 Specific The Client has freely scheduled their event during the COVID-19 outbreak and understands that all social interactions, and especially large gatherings, increase the risk of COVID-19 transmission. The Client exempts and releases the Vendor, its owners, officers, agents, employees, and contractors from any and all liability, claims, demands or actions or causes of action related to COVID-19 transmission.
Allies Services Client counseling, contract drafting, and advising for Colorado businesses and nonprofits. Limited templates and resources available to non-Colorado businesses on our website.
questions? www.creativeslearn.com @creativeslearnlaw
