All business owners want to keep their companies profitable and avoid costly lawsuits whenever possible. One way to accomplish these goals is to take steps to reduce your business's liability. Carrying liability insurance, structuring the company in the right way, and identifying and preventing risks are just a few proactive measures to take.

How to Reduce a Business's Risk

1. Purchase Liability Insurance

There are several liability insurance options available, each one designed to protect against claims and minimize financial losses. For instance, general liability insurance covers customer accidents and injuries, and property insurance covers damage to the business's physical structure. Additionally, product liability insurance covers losses that result from lawsuits over defective or dangerous products manufactured by the company. Finally, professional liability insurance, such as malpractice insurance for doctors, covers losses related to business-specific risks.

2. Locate & Actively Prevent Risks

Assess your business and take steps to avoid liability issues. For example, to prevent slips and falls, put down mats, fix broken or worn flooring, and hang signs to alert customers and employees of risks. Also, install cybersecurity software to keep sensitive business data safe, and hire professional cleaners to maintain safety and sanitation on the premises. These small actions can result in significant liability reductions.

3. Structure Your Business for Maximum Protection

How you structure the business is a significant determinant of risk. For instance, when a business is a sole proprietorship, the owner assumes 100% of the risk and is entirely responsible for all debts, liabilities, and losses. However, in a limited liability company, the owner is shielded from much of this personal risk. A corporation is another helpful business structure that keeps business assets separate from personal ones, while also granting some additional risk protections.

When you're ready to purchase liability insurance, trust North Carolina Farm Bureau Insurance® Group. Since 1955, they’ve been helping clients throughout Mecklenburg and Union Counties in North Carolina sign up for liability, workers' compensation, and all other types of insurance. Call (704) 841-8700 to request a quote today, or visit their website to learn more about their products.