Who Will Pay For The Losses And Expenses Of Commercial Lawsuit?

If you are a plaintiff or a defendant in a commercial lawsuit, you face the prospect of paying for an array of expenses and possibly even losses. The typical business interacts with a number of diverse parties on a daily basis. From customers to merchants, vendors and contractors, there's plenty of potential for things to go wrong. A business that plans for such scenarios will take out a commercial general liability insurance policy.

Liability insurance protects businesses against claims of bodily injury, property damage, slander, libel and plenty of other legal attacks concerning the business's activities. This type of insurance policy will protect businesses from a number of angles. Its indemnity will cover the costs associated with the business owner's legal defense. Many small business owners have actually found that certain clients require that the business has a general liability insurance policy in place before they'll sign a contract. So businesses that plan ahead for potentially damaging unforeseen circumstances and secure liability insurance will actually boost their chances of recruiting customers.

Yet the crux of a liability insurance policy is to protect the business in the event that unexpected events threaten its viability. The policy provides the financial resources that are necessary to keep the business operational no matter what type of lawsuits are presented by customers, vendors, merchants or other parties. In short, liability insurance offers financial protection against risks that even the most careful business owner can't avoid. The truth is that we live in an overly litigious society. People are willing to sue other parties, especially businesses, with little evidence in the hopes of finding a sympathetic judge or a business that doesn't want to bother with the complexities and annoyances of the legal system.

A liability insurance policy will also pay for the costs of both defending and investigating a lawsuit or claim. It will cover the associated court costs, police report costs, the premium on court-mandated bonds, witness fees and attorney's fees. Additionally, the insurance policy will pay for all reasonable expenses that arise when the business owner is asked to defend himself. For example, he'll be provided with the income that he loses by spending a day or two in court.

Most importantly, a liability insurance policy covers both judgments and settlements that are produced from covered suits. If your defense is not successful, the insurer will even cover the interest that is to be paid on the judgment as well as the injured party's medical expenses.

Clear the lease legally before selling your business

If you plan on selling your business and you don't own the property on which it operates, it is prudent to clear your lease before exiting. Your business lease is a contract that gives you the legal right to operate your business from the rented space. If you have months or years remaining on your lease when you sell the business, you'll likely run into a myriad of problems unless you clear it in a timely manner. Your best move is to clear the lease legally far ahead of the date when the sale is finalized.

Ideally, you have prepared for this moment long before it arrives. Savvy business owners who lease properties plan ahead by incorporating provisions into their business leases that allow for an early exit in the event of a sale. Most landlords are willing to negotiate such provisions to give business owners an “out” that permits them to legally clear the lease before it is up.

Yet most business owners don't have the foresight to push for such a provision. When they decide to sell the business, they are forced to find a means of legally clearing the lease. There are a few options when it comes to exiting an existing lease that has not reached its end. You can transfer the lease, renegotiate it or buy your way out of it. Regardless of what you choose, it should be performed fairly early in the sale process. This will ensure that the new owner will be able to operate the business without any conflicts and you'll be able to exit in a graceful manner. If you wait until the last minute, your sale has the potential to fall apart.

You must keep your landlord in the loop from the outset so that he is aware that a new owner will be operating the business from the property. If you include your landlord early on in the discussions, he'll be more inclined to work with you to legally clear the lease in a timely manner. When you bring him into the sales discussion, he'll be much more receptive to transferring or renewing the lease with the new owner. Remember, the landlord must be given ample time to ensure that the new owner is actually qualified to operate on the property and that he is fully capable of making lease payments in full and on time.

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