The smartest way to protect your business and the first line of defense is through signing a contract. Contract signing can be an intimidating activity for several small business owners. Nevertheless, not signing one can bring about many risks and added liabilities to your business. Deals should be meant to protect the parties that are entering into a business agreement. The main reason for a contract is to ensure that all terms of an agreement are written, with the aim of protecting the involved parties.
Importance of a business contract
A business contract ensures that all your agreements are in a written form. Verbal contracts are equally legally binding but, they can be hard to enforce in a court of law. It is essential to have all the agreements in writing to ensure all the concerned parties undoubtedly understand and agree with their obligations and rights. You may not need a lawyer for moderately simple transactions, but instead, use an online contract template that can be used for business contracts. However, it is still a decent idea to involve an attorney to evaluate the model before implementing it — mainly when more complex agreements are concerned.
U.S. Small Business Administration (SBA) claims that an agreement is lawfully binding when there is an offer made, and the party agrees to it. Additionally, there must be an item of value to be exchanged to make a contract legally binding. Most of these contracts are straightforward as well as easy to understand, hence, may not require an attorney. SBA also recommends that all the parties involved must be aware of the necessary state regulations governing the business agreement. If the other party comes from a different state, then the two of you will have to decide which state laws to follow when entering into the contract. All state legal requirements of a business contract are available online.
All critical information must be part of the contract
The information that must be included in the deal includes:
• Full names of the entities or parties entering into the agreement
• Date of the contract
• Contract expiry dates
• Amount of payment and due dates
• Damages for breach of contract
A contract must be as detailed as possible. It should cover such things as how and when payments are made, how and when services and goods are delivered and others. Besides, the contract must involve such information as:
• Who pays the fees of an attorney in case there is a dispute?
• Clauses that necessitates the parties concerned to enter into arbitration or mediation if a conflict arises
• Circumstances under which the contract can be nullified or terminated
Use understandable language
Business contract writings must be in clear and direct communication. Each provision must be numbered and labeled to make the document clear to all parties. Unambiguous language will also allow both parties to refer to the material quickly.
Carefully read the contract before signing
Signing a contract means you agree to the terms defined in the agreement. It is vital to ensure that you understand every single word in the document before putting down your signature. When signing a contract according to Bloomberg Business, ensure to sign using your company name and not personal names. Using a personal name when signing a business contract might put your private assets in jeopardy.
Protecting your business from digital liabilities
Some business owners may overlook the added cyber liabilities when subcontracting work out. Whenever you have added another link to the finance chain, it can open you up to more digital cyber liability.
Understanding the risks
Ensuring that your business is protected against cyber losses begins with a well-versed knowledge of the external and internal susceptibilities that your business faces. As the business owner, you will want to ensure that you put enough security on the ways where anyone can get access to your business by recognizing any weak points. To identify the possible risks, it requires getting informed concerning several cyber fraud threats and schemes such as malware, phishing as well as system hacking which faces most businesses.
If you have an internal data encryption system, you can protect yourself even if someone unauthorized gains access. From social security numbers of employees to bank routing digits, current cyber threats start with getting access to companies’ standard information that is left unprotected. It is essential for organizations to put up all the necessary measures to have all their critical information encrypted. All the high profiled information must be kept safe through full-disk encryption tools that usually come with most operating systems. By switching on these tools, it will ensure that all the information is encrypted hence, making them secure without slowing them down. However, it requires more attention for these devices to function. Encryption takes place where logins are not in use. To be on a safer point, make sure that all the computers are set to log out automatically after standing by for more than 5 minutes.
Ensure the security of the hardware
Most of the cyber-attacks take place through a computer system. However, some of these attacks take place when the physical equipment of an organization is stolen. Although this kind of crime is sometimes overlooked, it is essential to ensure that nobody walks away with your organization information that is stored on your computers. You should ensure that all your systems are locked down physically for security reasons. Tighten your security measures by providing that workers always keep the server rooms doors locked and closed.
Security as a company culture
Security involves everybody working within an institution. It includes both the owner of the organization and the employees or subcontractors to keep safe the customers’ and company information. Most e-commerce agencies handle this by making sure that their employees are aware of the means by which they can protect the business themselves by training them on cybersecurity practices as well as providing them with ongoing support. Some employees could not be aware of how to manage their passwords while online which may put your company information at risk. Thus, it is vital to conduct training sessions to enable them to know more about criminal activities online and how to avoid them.
The experts at Alliance are here to tailor specific coverages to help your business reduce their risk. Going well beyond the insurance part of the equation, creating proactive company policies is the best way to avoid liability. Reach out to us for some insights into reducing your business's risks.