I was reviewing a contract for a client who was offered what seemed to be a great business opportunity. No money up front, but a share in the profits. It seemed to good to be true, and as I read I found numerous issues which needed to be discussed.

In speaking with my client I found the need to backtrack and explain and define many terms that as a business person she needed to know to be able to make daily decisions. The words tumbled out of my mouth, “Each decision has legal ramifications.”

A scary thought for my client, which put what s/he was about to do in perspective. Suddenly, my hypothetical questions like, “What happens if you do not want to sell the business?” Because according to the paperwork I read my client, in a weaker position, would be forced to sell. This was not even a daily decision either– day to day things like purchasing office products, dealing with employees and clients.

It can be overwhelming because my client did not have a business background, but this was an opportunity, granted with some negotiation and some risk, but still in essence there was some possibilities. So here was my advice.

1. Do not panic.
2. Ask questions until you are clear or you make yourself clear.
3. Separate your personal feelings…this is not your friend, but a business associate.
4. Do not be rushed in making a decision. On things I am unfamiliar with (as a business person too) I invoke a 24 hour rule. It works on emails too.
5. Collect opinions because people have been faced with similar situations before, and you can learn from their history.

My client feels empowered now with understanding, and that is what you are striving for- to be able to make confident decisions especially in the New Year!

Insuring Your Risk
by Cynthia Pasciuto

Welcome to TrueNorth Business Consulting’s presentation of a Business Makeover. Each month will feature an idea that can help your business as featured on Diva Toolbox Radio. True North focuses on helping health and wellness practitioners to maintain and grow their business using the areas of business law, marketing, insurance and project management.

What is insurance?

Insurance provides risk management where the person purchasing the insurance or paying premiums transfers the cost of a potential loss to an insurance company. One might think in a business such as health and wellness practice that there are limited risks or only the rare occasion of malpractice. However, risk from the point of view of clients is very different and very much a reality.

What are the risks I need to protect from?

I have a quick analysis for you. Identify everything that can possibly happen from the instant your clients enter the front door of your office or space until some time well after they leave. For example:

• Trips and falls
• Injuries or ailments from what you did

Then you want to do the same, but from your perspective. What could you possibly lose?

• Fire loss
• Stolen items
• Disability
• Sickness

Insurance provides you will strategies to deal with all foreseeable scenarios.

What types of insurance should I get?

First, sometimes you are able to contract your risk away with another party taking the risk for you. They would be willing to pay out, but if that is not the case then insurance is an essential and cost-effective way to protect yourself and your business.

Looking back on the foreseeable scenarios—ones we can guess could happen. This is where you want to ignore all the crazy stories you have heard about from other people in your same line of work. This will focus on the common types of losses.

• Trips and falls in addition to fire loss and stolen items are covered under a Business Owners Policy, which covers your liability and property. This is in regards to your premises only.
• Injuries or ailments from what you did are covered under a malpractice or errors and omissions policy. This covers you in regards to your profession.
• There are disability policies and also health insurance to provide coverage for yourself.

Exclusions

I have heard countless stories from clients that they had insurance, but didn’t realize their loss was not covered because it was excluded on the policy. An exclusion is a person or incident that is not covered under your insurance policy, meaning the insurance company will not pay.

The exclusions need to be reviewed with the utmost case. This section varies from one insurance company to the next and could be the determining factor when choosing an insurer (an insurance company). You want to make sure you are not violating the insurance company’s guidelines.

Insurance can help you and your business. It may just seem like an expense that you will never use. I hope so! In the meantime though you will have peace of mind and don’t forget you can advertise that you are insured to make you stand out from other businesses that are not.