Legal Question in Business Law in California

Re: home bussiness/renting home

Yes, a good policy or policies of insurance.

Joel Selik

www.4thelaw.com

Re: home bussiness/renting home

Insurance will not prevent the filing of a suit, but, if the insurance covers the matters alleged in the suit, it will ordinarily cause the insurance company to step in and assume the defense and pay any judgment up to policy limits.

Insurance does not ordinarily cover punitive damages, and may not cover intentional wrongs or violations of the law.

Whether or not you have a formal lease-with-option or merely an informal understanding with the landlord, you should make sure you have a clear understanding in writing covering the proposed business before engaging in it.

Finally, as you may be aware, running a day-care facility is regulated and licensed, and you should become thoroughly familiar with these requirements before you get too close to offering services. This should include a determination that the premises are zoned for day-care use.

Re: home bussiness/renting home

Limiting liability is different than preventing lawsuits against certain parties. No matter how you set up your business or how much insurance you have, the owner of the property may still be named as a defendant if an accident were to happen.

To try and shield yourselves from liability, you can do many things. First, the current owner should incorporate and transfer the house to the corporation. Next, you should form a corporation to run the day care. Third, as already mentioned by my colleague, you should insure heavily.