What if……?

Was asked a question a few weeks ago by a consultant.

A question I was recently asked:

“What if I make a mistake and I get sued by a company?”

 “Are you a limited company?” I asked.

 “No” they responded.

I then explained that, potentially, they have put their personal assets at risk.  By not having a limited company they are holding themselves personally responsible.

“Ah…” they said.

I then explained that they could protect their personal assets by ensuring appropriate professional indemnity insurance was in place.

They could also incorporate and set up a limited company as a further measure of protecting personal assets but this could have positive or negative tax implications, depending on the circumstances. (See an accountant for this!)

Moral of the story.  Make only 1 mistake if you can.  But don’t make a second mistake by not having insurance to cover your first mistake!!!

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