Liability is a legal concept that holds your business—and in some cases, you, the business owner—responsible for the consequences of your business activity.
For example, if you're working on someone's house without any sort of business liability insurance, and you damage it, you can (and probably will) be held responsible for the cost of any repairs. If your employees or subcontractors get injured on the job, your business is responsible for these events—and can even get in some serious trouble if reasonable measures weren't taken to ensure worker safety.
It's extremely important for business owners to understand and consider potential legal liability when making decisions, taking on jobs, hiring people, and more. It is easier and cheaper to handle liability up front than to ignore it, experience something unexpected, and wind up being personally responsible for it.
Liabilities are debts or financial obligations your business owes to others—where others could be people, banks, vendors, etc.Continue reading...