Avoid cheap car insurance as a small business owner
The recession may have finished as a matter of technical accounting, but the general economic conditions for business remain very difficult. Whether you are a start-up or continue as a small business owner, there’s a temptation to cut the business overheads to the bone. This can be a false economy. Let’s start with a little law. If you are trading as an individual or a partnership, you are personally liable on all the contracts you make and for any losses arising due to your negligence (or criminal activity). Although there are slight variations in the law from state-to-state, the general rule about an LLC is that you are personally liable in tort and for any crimes you may commit, but there’s a shield to prevent you from incurring liability in contract. The general rule for a full corporation is you avoid personal liability under both contract and tort, although you can still be sued if members of the company believe you have breached your fiduciary duties as a director or senior officer. The other piece of law you need to know is that either you or the company will be held vicariously liable for whatever an employee does during the course of the employment. So if an employee is driving a vehicle owned by the business or driving his or her own vehicle on company business, either you or the company will be liable if the employee drives negligently and causes loss to a third party.
