What liability insurance is needed for a partner in a small manufacturing business to protect personal assets?
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What liability insurance is needed for a partner in a small manufacturing business to protect personal assets?
My father in law is a minority partner in a small business. The majority owner wants to sell the business along with the other minority owner. My father in law is OK selling the business but the managing partner is telling him that he should make sure he has liability insurance of some kind for protection.
Asked on May 1, 2018 under Business Law, Texas
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 6 years ago | Contributor
It is actually unlikely that liability insurance would help him if he is only buying it now as he sells the company. Insurance is not retroactive: it only applies to claims arising during the time that the insurance is in place. While there is no reason that your father-in-law should not consult with a reputable local insurance agent to see if there is some liability insurance product that would provide him with protection, there is a good chance that there would not be, since it would only cover him from the time he purchased the insurance through to when he sold the business (and so no new claims should arise against him).
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