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5 Ways a Car Accident Can Impact Your Small Business

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If you own or operate a small business, then you know that sometimes, your profit margin can be tenuous. A bad couple of months can set you back quite a bit. In some instances, multiple months in the red can spell disaster and cause the company to close.

This is especially true with the pandemic happening right now. We have seen the closing of thousands of small businesses, especially with the messy loan plan rollout.

However, a pandemic is not the only thing that can sink your small business. A car accident can sometimes do it.

You Must Pay for Damages

In a car accident, it’s rare for there to be no one at fault. If it does happen, it might be because:

  • An animal runs across the road, forcing a car to swerve
  • Weather conditions force a crash

In these instances, the driver had no control over the crash-causing events. If you’re not sure about whether you’re at fault, you can contact a car accident attorney for help.

However, if a court finds you responsible for what happened in a civil suit someone brings against you, you have no choice but to pay that judgment. That could be disastrous for your small business if you then don’t have the resources to cover payroll and other expenses.

A Car Accident Can Bankrupt You if You Don’t Have an LLC

An LLC is a limited liability company. It is a special kind of business structure, which:

  • Contains elements of a partnership
  • Also has sole proprietorship elements
  • Gives your corporation limited liability

To put it another way, an LLC gives you (and your partners, if you have any), protection against liability if something happens in your personal life. A car accident would qualify.

If you get in an accident and have to pay for damages because of a judgment against you, your company’s assets will be untouchable. That might save your business if you have to liquidate your other resources to pay for the damages.

If You’re Injured, You May Have to Step Back from Running the Company

Car accidents often involve injuries, and if this happens to you, it could mean that you’ll need to take some time away from your small business. If you have partners or employees you trust, they might be able to take over and cover the slack.

You may have to go through physical therapy or deal with a lengthy hospital stay. Broken bones or internal injuries can take many months to heal in some cases. If you don’t have the support structure to keep the business running, you might have to close it till you can come back.

It could be that when you’re healthy again, you might not have the resources at your disposal to start the company back up. On occasions like these, a bad enough car accident can be the death knell for your small business.

You Might Have to Change Your Business Model Temporarily

Sticking with that thought train, let’s say that a car accident seriously injures you. You have to stay home while you recover. However, you might be able to keep your company running if you switch up your business model.

Many companies can take their business online exclusively, as we’ve seen during the pandemic. If you have a couple of brick-and-mortar locations that sell things, you might go to an online sales format if you can’t physically come to work for a while.

This won’t be ideal, but if you have a loyal customer base, this might be the way to keep the business afloat until you can get back into your physical locations again.

You Might be Stuck Taking Public Transportation

One final way that a car accident can impact your small business is if the accident totaled your vehicle. Maybe you don’t have the money to get a new one right then.

If so, then you may have to take public transportation to work for a bit, until you can arrange financing for a new vehicle or get the money together for a down payment. Perhaps one of your employees can give you a lift to and from work, or one of your friends or relatives might be able to do it.

Car accidents can wreak havoc on your business plans. If you’re resilient, though, there is no reason to think that you can’t come back from an accident, and your small business can as well.


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