Company assets, both tangible and intangible, make business operations and eventual growth possible. Hence, protecting these resources is as equally important as developing them.
How to Successfully Protect Your Company’s Assets
Whether an office, pieces of equipment, the staff, products, processes, and other forms of business property, certain risks can threaten these assets and harm the organization in different ways.
As a business owner, you need to understand how you can protect company assets in the face of impending risks. Learn what to do to reduce business losses during uncertain times with the guide below.
What Is Asset Protection?
Generally speaking, company asset protection refers to any activity aimed at decreasing the risks of damage incurred by all resources owned by a business.
These activities can be done through various means, including maintenance management, installing passive and active physical and digital protection, and applying for copyrights and trademarks.
However, in the eyes of the law, asset protection is defined as lawful methods and strategies that seek to protect assets owned by an individual or the business against creditors’ claims to seize these properties legally.
In this blog, asset protection will cover both general and legal definitions.
Why Is Asset Protection Important?
Various risks can threaten an enterprise, no matter the size. Natural disasters, the coronavirus pandemic, and cyber-hacking are some of the more recent dangers that companies face.
In the face of an economic downturn, creditors will run after debtors whose businesses fail to perform favorably.
Asset protection can shield these lenders from taking away business and personal assets.
Thus, asset protection is essential in keeping personal and business assets afloat, even during difficult times.
As such, protecting your assets is as important as growing your wealth as an entrepreneur.
To better understand how to protect company assets, consider doing the following:
1. Understand the Risks Your Business Is Facing
To found out how to protect your company assets, you must identify the potential threats your business is facing.
Analyze the nature of your business and its setup, your physical location and the security and disaster risks, and all the resources you need to run your company.
For example, your company may be prone to fire, theft, natural disasters, cyberattacks, or even phishing. A good risk assessment practice is essential to every business.
It lays the groundwork for an effective company asset protection strategy. Additionally, consider whether your business can recover appropriately if these unfortunate incidents do happen.
2. Get a Business Insurance
After making a list of the essential company assets and the risks attached to them, purchase an insurance policy to protect your most vulnerable resources.
You may choose from any of the most common policies:
Business Insurance
This is an all-in-one coverage for your business assets, financial losses, business interruptions, and more. General business insurance is a must for all types of businesses.
Commercial Auto Insurance
This policy works for businesses that use vehicles for their operations.
Cyber Liability Insurance
Protects companies against losses related to data protection.
Liability Insurance
Covers the legal costs for liability lawsuit claims.
Workers’ Compensation Insurance
This is mandatory for employees who get injured or become ill while performing their duties at work.
Umbrella Insurance
Covers other assets not included in the different policies.
These types of insurance can help your company remain afloat when accidents and other unexpected problems arise.
3. Protect Your Company’s Physical and Digital Assets
Apart from the different types of insurance, your company can benefit from implementing security measures for both physical and intangible business assets.
Check out these recommendations to minimize risks of theft, unauthorized use, and damage to company resources:
Beef up the Security of Your Premises
Hiring security professionals to monitor and protect your valuable assets is one good way to prevent potential losses.
Install Security Systems and Other Mechanisms
Strategically placing cameras will help monitor and detect questionable behaviors from employees and outsiders. Security devices like alarms can also curb theft and damages.
Manage Resources Well
Keep your company devices and pieces of equipment working correctly by performing regular preventive maintenance.
Train your staff on how to use various company resources properly to help extend their life span.
Use Asset Tags
Locate your valuable company assets efficiently by embedding asset tags.
With such tracking devices, you’ll have peace of mind knowing that your company properties remain where they are or can be tracked when they’re missing.
Have Employees Sign Non-Disclosure Agreements
This ensures that your business retains rights over company data, valuable records, and intellectual property.
If deemed necessary for the nature of your business, consider having this agreement with clients and third-party service providers, too.
Secure Trademarks, Patents, and Copyrights
protect your company’s digital assets by registering ownership of your ideas and brand.
These digital resources can include photos, unique business processes, software or apps, company logo, and products.
Strengthen Online Security and Data Protection Measures
Implement proper access levels within the organization.
For instance, the management and executive departments should only be in charge of forwarding, editing, and printing the company’s paper and electronic files.
Add passwords and backup files diligently. Alternately, you can hire external information technology experts for some recommendations to reinforce cybersecurity.
4. Put Your Assets in a Trust
A ‘trust’ is a legally binding agreement entered into by the person initiating the trust, who’s also called the trustor or grantor, and the individual or entity responsible for managing the assets covered by the trust is also called the trustee.
The grantor transfers the assets to the trustee, who will keep them in the trust on behalf of another person—the beneficiary.
A grantor can place almost anything of value on trust, including real estate properties, savings and checking accounts, stocks, vehicles, and even a business’s ownership.
There are two basic types of trust: revocable and irrevocable. The former is quite flexible because the trustor can alter the trust or have the agreement dissolved in part or wholly.
If a creditor sues you as a company owner, the court may force you to pay by liquidating the assets covered by a revocable trust.
Inversely, an irrevocable trust is an iron-clad agreement where the trustor doesn’t have the said rights.
In the field of asset management, an irrevocable trust is a crucial tool because creditors can’t move to seize the assets of a business owner that are no longer in their control or management.
Additionally, any judgment imposed on the trustor won’t impact the assets covered by the irrevocable trust.
Wrap Up
Unfortunately, some business owners remain unaware of the threats to their company assets. As such, they’re at a loss as to how to protect themselves.
Apart from the basics—hiring security and IT experts or getting business insurance—business owners need to know the extent to which their business and personal assets are vulnerable to damages, liabilities, debts, and other external obligations.
In these cases, companies and business owners may need extra protection.
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