Welcome to Sam’s Sidebar, my new weekly Q&A post where I answer your burning legal questions about growing and protecting your online business! This week, we’re answering questions about business liabilities and how to protect yourself, your business, and your finances in addition to registering as an LLC.
In this episode, you’ll hear…
- What liability is — and why it matters to you
- The difference between in-person and online liabilities
- How to legally protect yourself from liability
What is liability?
Liability is what you’re responsible for as a business owner and human. Essentially, the things you can be held responsible or blamed for if things go wrong. If you have an in-person gym, you have to think about what could happen if someone is injured using your equipment. Sometimes in-person liability can seem obvious, but that doesn’t mean you’re off the hook when you’re offering online coaching, group programs, or courses.
What kinds of liabilities apply to online businesses as opposed to in-person services?
Depending on what services you provide, online liabilities can range from people saying they got sick or injured because of something you told them to do to losing money or other forms of harm from working with you. You can also get hit with copyright infringement or trademark claims, have people steal content from you, or run into contractor or employment issues. Running an online business does not make you immune to liability. Fortunately, there are ways to legally protect what you’re liable for.
What can I do to protect myself from liabilities?
One way to protect yourself is getting liability insurance because it protects your business’s money. Another way to protect yourself is by registering as an LLC, which protects your personal identity from being to blame for whatever happens in your business. But the real “secret sauce” when it comes to protecting yourself from liability is in the way you run your business: Knowing your scope of practice and sticking to it, prequalifying your clients, and taking care of potential problem clients early on.
Legal protection requires a holistic approach. It’s about much more than one contract, type of insurance, or registration. It’s dialing in a number of key things in the middle that can really cut off the need for legal intervention in the first place.
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Resources Discussed in This Episode
- Episode 9. How to Register Your Business to Protect Your Personal Assets
- Episode 2. Scope of Practice for Coaches (What You’re Legally Allowed to Do)
- Episode 69. What Coaches Can Legally Do (Scope of Practice Part 2)
- Pre-quality video training + 3 email templates: samvanderwielen.com/prequalify
- Legal Workshop: 5 Steps to Legally Protect & Grow Your Online Business (+ save $400 off the price of the Ultimate Bundle™): samvanderwielen.com/legal-workshop
- Episode 5. What to Do When a Client is a Pain
- Episode 42. Business Insurance Mistakes That Could Cost You BIG
- Submit your legal question for an upcoming episode of On Your Terms right here: https://samvanderwielen.typeform.com/to/UiUT1dEA
If you’re ready to legally protect and grow your online business today, save your seat in my free workshop so you can learn how to take the simple legal steps to protect the business you’ve worked so hard to build. Click here to watch the free workshop so you can get legally legit right now!
Sam Vander Wielen: Hey there, and welcome to Sam’s Sidebar. It’s my brand new weekly Q&A episode, where I personally answer your most burning and important questions about starting and growing a legally protected online business in ten minutes or less. So, every single Thursday, I’m going to drop a new Q&A episode. I’m so excited. Let me know in the reviews if you’re excited too.
So, this week, you’re going to get a legal tip all about liability beyond LLCs. Are you ready to dive in? All right. This week’s question is from our listener, Devin. Devin asked, "I’m curious about liability beyond having an LLC. I’m hoping to launch an online fitness and movement business. Liability insurance is a big thing for in-person services, but what about virtual services and programs?
So, I am so glad that you asked this question, Devin. Let’s clear the air. So, liability insurance and otherwise is important whether you’re thinking about working with people in-person, online, on a spaceship, through the metaverse, anywhere. Liability is everywhere. So, I want you to take that away from this tip in the sense that your liability doesn’t really change just because you’re working with people online versus in-person.
So, what is liability? Liability is essentially what you’re responsible for as a business owner and a human. So, what can you be held responsible for? What can you be blamed for? That’s essentially how you think of it as a business owner. That’s how you think of liability.
So, if you open an in-person business, like a gym, you’re thinking, what’s my potential liability? People could get injured, an employee could have an issue, a trainer could harass a customer or another trainer, there could be a slip and fall outside when it snows. So, oftentimes, you will think that the in-person stuff is kind of obvious.
But what about what’s somebody’s liability when you’re offering online coaching services? When you’re offering things like courses and group programs? So, you could have somebody who says that they got injured, sick, lost money, or experienced some sort of harm from working with you or taking your course. You could get hit with copyright or trademark infringement. You could have somebody steal your work. Or you could also run into your own contractor or employment issues.
So, like Devin mentioned, getting business insurance – which liability insurance is just one type of business insurance. I have a whole episode for you that I’ll link down below if you want to learn more about business insurance – is just one way to protect yourself because that is what protects your business’s money.
The other way to Devin’s question that we kind of think about liability is having an LLC. Because having an LLC is when we provide you with what we call limited personal liability protection, meaning that it would keep your personally out of the liability of your business. We don’t want you to be personally responsible, otherwise known as liable, for what happens in your business. So, if your business gets sued, we don’t want it to be that you’re personally getting sued. And then, your business insurance steps into that, even your business doesn’t have to pay for your lawyer and any sort of judgment or settlement.
Personally, though, I think the real "secret" to avoiding liability as much as possible in online business is the in between stuff. It tends to be stuff that you don’t see. It’s not the stuff that any contract or policy or LLC will cover. So, for me, this is more like learning what your scope of practice is and actually sticking to it.
I have two scope of practice episodes for you. You want to start with Episode 2 and, I believe, it’s Episode 69. I’ll link to the both of them below. But I have a two-part scope of practice series for you. You’re going to want to listen to that because that’s what tells you what you can legally do and not do based on where you live, how you’re qualified, all that kind of stuff.
You also want to think about prequalifying clients the right way so that you avoid a lot of these annoying legal headaches to begin with. I think that prevention is a very underutilized tool when it comes to being legally safe in your business.
And, I mean, not last but not least, there are many other things you can do, but one of the other things I want to talk with you about is that you also need to know how to handle "problem clients" so that they don’t become a legal headache down the line.
There are a lot of things that happen between the time of a person who’s angry or disappointed or whatever to when they sue you. There’s a lot you can do in between, and it’s really learning how to handle those problem clients the right way, not to mention trying to prevent working with them as much as possible.
So, probably what you teach your clients and customers, legally protecting your business is pretty holistic too. It’s a well-rounded approach. It’s not just about having a contract here or there. It’s really understanding how to talk about what you do, how to navigate sticky issues the right way. It’s really that in between stuff, and that’s so much of what I teach people.
That’s why I created the Ultimate Bundle so many years ago because I wanted to give people, yes, the legal templates, the hardcore policies and contracts, and all that kind of stuff that you need to send to people, because you got to have a client contract, you have to have website policies, you have to have a course contract. All that stuff is given.
But you also need to understand how to talk about what you do safely. You need to learn your scope of practice. You need to know what to do when somebody doesn’t pay you. You need to know what to do when someone steals your content, how to navigate these sticky issues that come up along the way.
So, that is all what I do inside of the Ultimate Bundle. In case you haven’t heard of it, it’s my signature program that gives you over ten DIY legal templates, all the contracts and website policies that you need, plus it gives you access to over 35 on demand video training ceremony teaching everything from how to form your business and setup your LLC and get business insurance, all the way through to working with clients having a thriving website and social media presence, and even protecting your intellectual property.
So, with that, I’ll share links down below where you can save $400 off of the Ultimate Bundle. You can learn more about all the things that I’ve referenced in today’s episode. There are other episodes of my podcast, On Your Terms. And if you liked this episode, I hope that you’ll do me a favor and go ahead and leave me a quick review.
So, thank you so much for joining me for Sam’s Sidebar. Make sure you check out the show notes below for related resources, full episodes of On Your Terms which I post every single Monday. And as always, if you have a question that you like to submit for a future Sam Sidebar episode, please use the link below to submit the form and so I can get your question and, hopefully, answer it on a future episode. Thank you so much.
Thanks so much for listening to the On Your Terms podcast. Make sure to follow on Apple Podcasts, Spotify, or wherever you like to listen to podcasts. You can also check out all of our podcast episodes, show notes, links, and more at samvanderwielen.com/podcast.
You can learn more about legally protecting your business and take my free legal workshop, Five Steps to Legally Protect and Grow Your Online Business, at samvanderwielen.com. And to stay connected and follow along, follow me on Instagram, @samvanderwielen, and send me a DM to say hi.
Just remember that although I am a attorney, I am not your attorney and I am not offering you legal advice in today’s episode. This episode and all of my episodes are informational and educational only. It is not a substitute for seeking out your own advice from your own lawyer. And please keep in mind that I can’t offer you legal advice. I don’t ever offer any legal services. But I think I offer some pretty good information.
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DISCLAIMER: Although Sam is an attorney she doesn’t practice law and can’t give you legal advice. All episodes of On Your Terms are educational and informational only. The information discussed here isn’t legal advice and isn’t intended to be. The info you hear here isn’t a substitute for seeking legal advice from your own attorney.
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