13 Potential Risks to Your Assets You Should Know About
With 1.3 million lawyers in the country, and considering the percentage of high asset individuals, there are not a lot of assets to share among those lawyers looking for a paycheck. Asset protection is critically important with those numbers, and your time and money are well-spent in consulting with asset protection specialists to keep yours. Here are 18 risks that are commonly cited in lawsuits in the U.S.i
Malpractice suits – Though these are common among attorneys and doctors, they also crop up against insurance agents, financial advisors, and other professionals.
Onsite personal injuries – also called “slip and fall” accidents, customers in a business often sue if they slip on a wet floor, stumble on stairs, or in some other way are injured.
Vehicle accidents that are work related – If you or your employees are engaged in an activity related to your business and have a vehicle accident, your business could be at risk of lawsuit. If an employee is running an errand for you and has an at-fault accident, your business has deeper pockets and could be the target.
Unlawful termination or other discrimination at work – Lawsuits can be filed whether they have merit or not. Disgruntled employees or fired employees can and often do sue. Sexual discrimination can also be a risk your business can face.
Defective products – Lawsuits over defective products can be due to products you produce in business, but also for those you buy from others and resell in some cases. Lawyers go after all the pockets involved if their client is injured by an allegedly defective product.
Trademark infringement – Usually related to using trademarked images, audio, logos, or other materials, these suits are filed by companies even when your use is just similar in some cases to their trademark.
Breach of contract – Many businesses provide products or services under the terms of written contracts. These contracts can have terms related to quality, timeliness of delivery, or other terms that could result in a suit. Whether due to negligence, honest mistakes, or unintentional violation, you could be liable.
Personal Asset Risks
Vicarious liability – Usually, this is related to the actions of someone working as your agent, such as a lawyer, real estate agent, etc. If they are working under your direction, you could be sued for their actions on your behalf.
Divorce – Divorce is stressful enough, but your ex-spouse also knows a lot about your assets and business, even more than your creditors know. Just ask those who have had multiple incidents of an ex-spouse coming back and suing for more money when they see the business doing well or their career gets a boost.
Social host risk – Parties are fun, but you risk liability if you over serve some guests and they have a vehicle accident on the way home. This really becomes an issue if you are entertaining business associates or customers.
Secured debt – Automobiles, expensive furniture, home office equipment, and other items you may finance with the item as security all create a risk of loss of the asset if you fall behind in payments.
Unsecured debt – Though there is not an asset securing the specific debt, creditors can sue and get judgements that could result in seizure of bank accounts or other assets to satisfy the debt. Depending on the state of residence, bankruptcy may be the only way out.
Medical problems – You could be incapacitated and unable to work, and you could pile up large medical bills that you cannot pay when they demand payment. This is a double-hit, as you may suffer income reductions from not working as well as increased immediate debt.
While this long list, and an unlucky number as well, could be a bit scary, it does not need to be. Asset protection specialists are ready to help you with insurance advice, trust formations, and other asset protection strategies. Often the cost is minimal compared to the peace of mind.
i 8 Asset Protection Strategies – How to Protect from Lawsuits, MoneyCrashers.com