Is business interruption insurance a worthwhile investment?

A business partnership is one of the most important professional relationships you may ever have. Unfortunately, many business partnerships go the way of romantic relationships and terminate in acrimonious, sometimes traumatic breakups. Just like people don’t go into a marriage expecting to get divorced, people don’t start a business partnership with the expectation that they will have to dissolve the partnership. There are certain issues that you can try to avoid that might put unnecessary strain on your business partnership. Disagreements about the responsibilities of each partner Before either of you commit your time, money or other resources to a business, you need to have a written partnership contract. Your contract should outline what each of you will do or provide for the company. If you don’t actually discuss and spell out the responsibilities and expectations of each partner, you could easily clash over unmet expectations and the resulting sense of disappointment they create. The more thorough and honest you are while drafting a partnership agreement, the easier it will be for you to know what to expect and how to resolve conflicts in the future. One business partner engaging in fraud or breaching the contract One of the most common reasons for people to get into contentious partnership disputes relates to the behavior of business partners after they sign an agreement. When one business partner doesn’t fulfill their obligations, resentment can grow to a point where it impedes the relationship. It may also be possible that your business partner engages in some kind of fraud that affects you, the company or its customers. They may have lied to you about what they intended to contribute to the company or their employment history and skills. These actions could create serious legal risks. Failing to talk about the end of the partnership at the start If you only talk about the near future when discussing your business with your partner, you may eventually disagree about the necessary steps for your company. For example, if you intend to retire by the age of 65 and will want to have your partner buy you out or to sell the company at that point, it’s important to disclose that expectation early in the relationship. Otherwise, you could wind up battling each other and depleting your company’s assets. Partnership disputes can sometimes get resolved amicably. Other times, they may require the dissolution of the partnership or even the sale of the business. Planning ahead to avoid partnership disputes will protect the investment you make in your new company.

Every professional needs to consider the risks of doing business, including facing claims about substandard services from clients. Insurance coverage is one of the most important means of mitigating professional liability. Skilled, licensed professionals often carry specialized insurance coverage. For example, real estate agents may carry errors and omissions coverage in case they accidentally make mistakes on paperwork or give their clients improper advice. Professional liability insurance can protect individuals from lawsuits by providing direct compensation to clients affected by mistakes that they have made. Coverage is critical to avoiding litigation and ensuring personal financial liability. How much professional liability coverage do people running their own practices or small businesses generally need to carry? CLIENT DEMANDS OFTEN SET THE STANDARD When a professional specifically partners with businesses, they may find that the companies that hire them have a standard expectation for insurance coverage. Frequently, those contracting with businesses need to have proof of at least a million dollars in professional liability coverage. Maintaining that amount of coverage can indemnify the professional in the vast majority of cases where clients might make a claim. It can also help make them eligible for lucrative contracts with successful businesses. POTENTIAL LOSSES CAN INFLUENCE COVERAGE AS WELL The nature of the services that a professional provides can influence how much coverage might be necessary for their protection. Architects who could face multiple claims from different parties if an error results in an unsafe edifice might need to carry more than a million dollars in coverage. Their policy may need to cover the losses suffered by the property owner and any injuries people incurred when an issue arose. The more people that a single mistake could impact and the greater the likelihood of a professional’s mistakes causing substantial financial setbacks, permanent injury or death, the more important generous amounts of coverage become. Professionals may need to sit down with someone who understands liability rules and insurance regulations to decide what amount of coverage is necessary for optimal protection. Purchasing adequate insurance coverage is a key step toward limiting personal and professional liability. Professional liability insurance can help protect people against mistakes or oversights that could not only affect their careers but also their personal finances.

Property owners hire contractors with the expectation that they’ll take care of a project in a professional manner. Most projects are completed without any issues, but there are times when construction defects may plague the process and vision of interested parties. Determining what type of defect that’s present is often the first step in the process of getting it corrected. The following are the most common kinds of construction defects that may impact the integrity of any particular project. DESIGN DEFECTS Design defects happen if there are flaws in the engineering or architectural plans that govern a project. They may arise because of errors or omissions that occur during the design process. Structural issues and other serious problems can occur because of design defects. For example, lack of proper drainage because a building’s design doesn’t allow for it can lead to water damage over time. MATERIAL DEFECTS Material defects are the result of using substandard materials for a project. In some cases, this may be because of inappropriate material substitutions. These defects vary in severity based on how crucial the material is to the project. For example, poor quality concrete used as foundation is typically a more serious issue than poor quality trim being used around interior doors. WORKMANSHIP DEFECTS Workmanship defects occur when the quality of the work doesn’t meet the client’s agreed-upon expectations or the requirements for the project. This type of defect can encompass any aspect of a project, such as electrical work, plumbing, roofing or framing. Defects in this category may lead to safety hazards or place the structural integrity of a building in jeopardy. SUBSURFACE DEFECTS Subsurface defects relate to issues with the ground or soil beneath a structure. These defects can cause serious problems, such as foundation shifting or settling, leading to cracks and structural instability. Poor site preparation, such as inadequate compaction or failing to properly account for soil conditions, often contributes to these defects. When a construction defect occurs, many contractors will stand behind their projects and correct the problem. Yet it’s possible that a property owner will take legal action if their contractor doesn’t correct a defect. Legal assistance is beneficial in these cases because they can often be particularly complex and lengthy affairs.