If you have a professional license, you can also wear a sign that says “Please Sue Me.” The general belief of the public is that a profession is very rich and highly insured, which leads to an easy payday if they can claim that you did something wrong or that the result of something you did correctly was not ideal for them. In this economy, the problem of frivolous lawsuits has gotten even worse. About 50 million lawsuits are filed each year; If you win a dollar, there’s someone out there trying to take it from you. Implementing a comprehensive asset protection plan is an absolute must.
The first step in protecting a professional practice is choosing the right form of business entity. You should always choose an entity that limits your personal exposure. After all, if someone is successful in a lawsuit against you as a professional, you shouldn’t be allowing them to recover the assets you own as a spouse or parent. Generally, a limited liability company (LLC) will more effectively protect your personal assets from the debts and liabilities of your professional practice. A professional corporation (PC) or professional association (PA) will also offer protection against the debts of your practice and any mistakes made by any of your employees, but will not protect you personally if you are personally sued for your own negligence.
A limited liability company (LLP) is an excellent vehicle for professionals who want to come together for business purposes but still separate their personal assets from professional liability while practicing. While an LLP will protect you from the mistakes of your partners, it will not protect you from mistakes you personally make. A general partnership is very high risk when running a professional practice as it exposes you to liability for the actions of either partner.
The most important step you can take as a professional looking to insulate yourself from any liability arising from your practice and protect your personal assets is to conduct a liability and risk management audit. Business structure, policies, procedures, operations, and contracts must be reviewed to create an airtight asset protection plan. As your asset protection attorney, my job is to identify problems before they become lawsuits. The sooner we find a breach in his armor, the more successful we will be in protecting him from any loss. If you wait until a lawsuit is served to form your asset protection strategy, it will be too late.
For more information on how to protect your personal life from the risk and liability of your dental or professional practice and to schedule a free consultation, contact our South Florida asset protection firm.