Every CEO wants their company to last a long time, but are the suitable measures in place to ensure that this happens? Many unpredictable things can shake your company, and while most are unavoidable, some things can be done to reduce its effect. In most cases, these measures will be the key to surviving even the worst scenarios.
In a business, you can never know what is going to happen. It could be that an employee gets into an accident while on the job or a natural calamity destroys your property. There are a lot of things that can happen, and they can become substantial financial burdens. Between paying off damages and going through courts, a single incident can cost you your business. That is why you need to get the right kinds of insurance to help cushion the expenses.
These insurances can also protect you against damages and claims made by a client. The price of E&O insurance, for instance, would be significantly lower than when you pay for a full-court settlement on your own. Similarly, a customer or employee that will get injured on your property will likely demand medical payments. Instead of paying it from your own sales, you can use general liabilities insurance.
Damages done to your equipment can also be covered by insurance. In fact, even your own property and vehicles can fall under this. With insurance, you can protect yourself from huge costs and can rest easy knowing that a single accident will not cause you to go bankrupt.
No matter how big or small, every business needs its own team of legal consultants and lawyers. They help make sure that your business is following the laws and regulations of your state. Their primary function is risk mitigation, so if you are getting a lawyer when someone is suing you, then it might mean that you are too late.
When legal documents are involved, it is always best to have a legal consultant verify whether the terms are legal and true. This is especially the case for contracts and agreements between clients, suppliers, and board members. Contracts, once signed, can be difficult to amend, and you do not want to be caught creating an agreement that is unethical or unfair.
Sometimes, businesses may need a lawyer for specific cases such as injury to employees or intellectual property. In this case, the lawyer may also serve as a mediator between you and the grieved parties. It is easier for you to settle an agreement when they are involved.
Secure Intellectual Property
When creative materials, works, and content are involved, a company needs to secure its intellectual property. Even something as basic as a logo or a brand name would require this. These assets are some of your most powerful tools, and when abused by others, they can also damage your own reputation. Trademarks, patents, and copyright are what you need to secure, but it largely depends on what you want to protect.
These are important because, without them, others can easily copy and make fake products without any repercussions. If these counterfeit products and services are faulty, then the customers might associate them with your brand. By protecting your assets, you can save yourself from potential damages caused by these fake labels.
Similarly, intellectual property protects your and your employees’ ideas and innovations. When you create something novel and unique, you can claim that you are the first to discover it through a patent. If someone else wants to make something similar to your invention, they need to secure your permission first.
As much as we would like it, we cannot control every employee’s action in your business. For all you know, some of them may be creating false claims or transfers and disguising them as business transactions. This is why auditing is vital to ensure that financial statements are true and whether funded projects are progressing.
When a company fails to audit, it can result in several serious issues. At the very least, you can end up spending so much money on things that are not being appropriately implemented. It could be that some managers are just prolonging specific projects to get as much funding as possible and pocketing it.
On a more serious note, failure to audit could result in security breaches and tax issues. Some may be doing illegal transactions under your name without you realizing it. When they end up being discovered, you have no way to defend yourself because you neglected to do proper auditing.