Call Us Now
Email Us Now
Cigar businesses of all kinds have unique assets and face industry-specific types of risk. Owners and managers need to think about protecting their business’ assets in ways that take these into account. We’ll delve more deeply into these issues later in this series, but here’s an overview of the most common asset protection strategies for companies operating in the cigar industry space.
Asset Protection Strategy #1: Insurance
You probably already have multiple insurance policies, like liability insurance, workers’ compensation insurance, and property insurance. Most businesses have these. As a cigar business operator, however, you might benefit from some additional insurance types.
For example, if you operate a cigar lounge that serves alcohol, you might need liquor liability coverage. If you’re a manufacturer of cigars, you might want to have product liability insurance coverage in case someone sues you because they believe your product caused their health problem.
Asset Protection Strategy #2: Employment Contracts
Cigar businesses run on specialized knowledge. At yours, there might be one or more employees with intimate knowledge about the business’ various processes and practices. Maybe there’s an indispensable store or farm manager with information your competitors would love to see. Or a sales rep with a list of cigar industry contacts you’ve worked for years to cultivate and that’s now worth its weight in gold.
If this person were to work somewhere else, could they use what they know to hurt your business? It’s possible. Employment contracts, like non-compete and non-disclosure agreements, can help prevent departing employees from competing against you or using confidential information to your detriment.
Asset Protection Strategy #3: Succession Planning
Making plans for how a business should operate after the departure of an important individual is an often overlooked part of any business. Failure to plan for the transition can be especially detrimental to businesses in the cigar industry because so many are run by just one or two key figures.
Various tools are available to deal with the potential problems that could arise when a principal leaves the business, including life insurance policies for key personnel and buy-sell agreements.
There’s no one-size-fits-all asset protection strategy in the cigar industry. Venerable Law can help you assess your business’ needs and choose the right path for your operation. Call us at 813-680-4530 to schedule a no-cost consultation.
