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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