Protecting Your Business With Layers
by Rachel Brenke, Lawyer

You build up your business and don't want it to be torn down.  In an age where people have access to legal information and resources via the web, customers can become litigious, demanding and confused on how business transactions work.  As a business owner, it is your responsibility to protect your business.  Holding your breath and hoping you don't get an unhappy or crazy customer is setting you up for failure.

The main layers of protection are the business formation, insurance policies, contracts (or terms of site) as well as customer data protection.

Protect Your Business

It is no secret there are many protection tools available for your business, but understanding how they work together is important. In fact, many business owners fall into this misunderstood idea that choosing one tool is enough. Unfortunately, the reality is that protection is created through layers of the various tools available. The path of protection is to have your clients go through contract provisions, and then insurance policy, and finally your business formation.

First, having proper lawyer-drafted contracts implemented in your business will help to inform customers of policies, provide hurdles to any issues a customer may have and provide a legal document to be referenced in situations.

Small business owners can snag lawyer-drafted contract templates to take to a local attorney for quick adjustments from BlogLegally.com

Next, you have a layer of a liability insurance policy.  By having this layer, you can defer clients to the company to resolve any potential liability issues that arise.  This frees you up to focus on your business and (hopefully) reduce costs to extinguish any "fires" that may come up.

The core layer would be your business formation choice.  For example, choosing a Limited Liability Company divides the business and personal assets for protection.  See more about this here. With the formation at the core, if customers get through the last two layers then they have to engage in a legal transaction such as court or mediation for a resolution.

Protect Your Customer

In business there is more than just your business protect.  You have a duty to protect your client or customers as well.  On top of the tools listed above, there is customer information that you must protect. 

Consider this, you hop online to Google-search yourself. And all of a sudden you see your personal address, email address, phone number and perhaps a credit card number.  This is not uncommon with many businesses operating without understanding the security measures needed on the Internet.

As a business owner, you should be vigilant to identify the information to be protected.  Information to protect includes (but is not limited to this list):

• email addresses
• credit card numbers
• birthdays
• home mailing addresses

Keep these in the back of your mind as you go through setting up your website, processing payments and storing sensitive personal information.  Many third-party systems have security measures in place that can give a business owner peace of mind (such as Paypal and Square for payment data), however, always check the terms on these third-party sites to ensure the safety measures are in place. 

For example, some free sites that are used for contact forms and contracts leave personal information public and exposed.  Any one can readily Internet-search and retrieve this information, despite ones belief that entering data online is secure. 

Further, if you are using a website system like WordPress you may want to consider SSL certificates (small data files that bind a cryptographic key to the data being submitted) to be installed on your site to create a secure location for this information. 

As you can see, being a business owner is more than the marketing, sales and balancing it all.  Protection is the name of the game that many business owners fail to take the time to do.  Use this article as a checklist to get your ducks in a row so that when you do hit success it won't be pulled out from under you.

Rachel Brenke is an author, photographer, lawyer and business consultant for photographers and bloggers. She is currently helping creative industry and blogging professionals all over the world initiate, strategize and implement strategic business and marketing plans through various mediums of consulting resources and legal direction. See more: http://www.thelawtog.com/meet-rachel-the-law-tog/

Disclaimer: I am a lawyer but I'm not your lawyer! View my entire disclaimer here
http://www.thelawtog.com/legal-disclaimer/

 

Have a legal-based question for Rachel?

Ask here. Your question/answer may be printed in a future issue.