Running a business is a matter of managing the ups and downs. Hopefully more ups than downs. Whether part of the board or one of the top executives in a corporation, you realize you’ve got to handle the pitch and roll in order to keep the business afloat. Particularly in these difficult economic times. During financially difficult times people are more prone to seek out and take legal action against any perceived corporate misstep. Top-level decisions can be challenged by investors, regulators, and even criminal prosecutors. And, so it is more important than ever that directors understand their obligations and potential liabilities.
No one wants to get into trouble. Nobody wakes up and thinks, “Boy. Today, I think I’d like to test the limits of my legal and insurance coverage. Honey? Get the 4-wheelers out! We’re going to test them out on that golf course.” Trouble is a thing that pops up when least expected. The trick to taking care of trouble is making sure that as many of these little gaps as possible are not problem areas. Without being alarmists, it can be surprising the things that American adults can be found personally liable for. A large lawsuit can boil down to something simple like:
When phrases like “umbrella insurance,” “gap coverage” and “additional liability insurance” get thrown about by legal professionals, it’s easy to feel buried beneath the flood of jargon. But guess what?! I’m here to throw you a life preserver, and pull you out of the waters of legalese. And speaking of life preservers, there’s a big one out there, and it’s being offered to medical and other professionals by XINSURANCE. It’s called Asset Protection. Jacob Stein, a University of Southern California attorney who specializes in teaching asset protection, writes about the necessity for orthodontists, doctors, attorneys, real estate agents and other professionals, calls asset protection “a set of legal techniques and a body of statutory and common law dealing with protecting assets of individuals and business entities from civil money judgments. The goal of all asset protection planning is to insulate assets from claims of creditors without concealment or tax evasion.” So, in normal people language, asset protection is like a veil around your assets. Or, even easier to understand, it’s like a moat. With a fence around that moat. And a Doberman Pinscher. A Doberman with a black belt.