Six Tips for Keeping Your Yoga Business Out of a Bind

Maybe you’ve lost your nine-to-five desk job. Perhaps you’ve decided to quit the office rat race altogether. Or maybe your inner spark simply ignited into a consuming fire to begin anew. Whatever the reason, you’ve decided to turn your yoga practice into a full-time business.

You’ve obtained all of your certifications. You’ve lined up your financing.

Now what?

Prior to closing the windows and cranking the heat, focus your drishti on the following six tips to keep you in the flow and out of court:

·         Incorporate Yourself. Depending on the size of your prospective business, a simple limited liability company may work for you. If you have practices in multiple locations or are offering products as well as services, you may want to form a C- or an S-Corp. There is no one correct way to get incorporated. But there is a wrong way – do nothing. Do not expose yourself to potentially disastrous personal liability. Speak with an experienced commercial lawyer about your specific needs.

·         Check Your Lease. Many new businesses fail to read the fine-print on leases restricting the very activities those businesses intend to conduct. Have an experienced commercial real estate lawyer review the lease before you sign.

·         Obtain Proper Insurance Coverage. Not all policies are alike. There is insurance tailored for studios and insurance for teachers. Depending on how you classify your instructors, you may need multiple policies for them, too. Liability, employee, and director/owner policies differ from state to state. Be sure to discuss your options with a competent insurance professional before you open your studio to the public.

·         Mindfully Classify Your Staff. There is a difference between “independent contractors” and “employees” in the law. This difference affects how your staff is paid, taxed, insured, and treated by the courts in the event of an adverse job action. Confusingly, even if you consider a staff member to be an independent contractor, if you exert too much “control” over that person (scheduling, instruction, etc.), the law (taxing authorities, courts) may treat that person as your employee. Speak with experienced employment counsel to better understand this tricky but important distinction.  

·         Use Narrowly Tailored Waivers and Releases. Have your students sign waivers and releases before they begin their practice with you. Be sure to include release language for your instructors as well as the studio. Many lawyers advise against asking students about pre-existing injuries. Consult with an attorney whom you know and trust on this issue.

·         Know Your Staff. Vet your staff. Verify a person’s training. Look for feedback from the studio’s students once a new hire begins. Speak with competent employment counsel about preforming a legally permissible background check.

Like every yoga practice, each business has its own unique opportunities and challenges. Following these six easy steps will help minimize your risk in your new yoga venture. Speak with competent tax, insurance, and legal professionals before you get started. Or meet with an experienced attorney to provide a professional audit of your current business practices.

Namaste. 

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Kevin Burke

Kevin Burke is a partner in the Litigation, Labor & Employment Practice Group at Lippes Mathias Wexler Friedman LLP. EDUCATION: J.D., George Washington University Law School Georgetown University - B.A., magna cum laude Nichols High School School (Buffalo, New York) EMPLOYMENT: Lippes Mathias Wexler Friedman LLP - A partner in the Litigation Practice Group INTERESTS: Member, Nichols School Alumni Board Past Board Member and Officer, Western New York Trial Lawyers Association Bennett High School's Law Magnet Program Bar Association of Erie County Annual Mock Trial Tournament Attorney Coach Past Member, Kiwanis Club of Buffalo Past Member, Child & Family Services Annual Fund Board Leadership Buffalo Graduate, Class of 2006

Is your business one cyberattack away from financial ruin?

A savvy business owner already knows the value of property and liability insurance. Yet in today’s digital age, more and more employers are adding cybersecurity insurance in their list of must-have protection.

Cybersecurity insurance is designed to assuage losses from cyberattacks, such as breaches in data, distributed denial-of-service attacks and network damage. With cyberattacks steadily on the rise, no organization is safe.

According to a 2015 report by the Ponemon Institute, the Target data breach in 2013 resulted in 40 million stolen credit and debit cards, as well as 70 million records containing identifying information about Target customers, including names, addresses, email addresses, and phone numbers. Other notable cyberattacks in 2014 include hacks on eBay, JPMorgan Chase & Co., Staples, and Sony Pictures Entertainment.

Small businesses are not immune to a cyberattack, either. Breaches against small to mid-size businesses have risen more than 300 percent in the past two years, according to the security company Symantec.

The Ponemon Institute indicates that cyberattacks throughout the remainder of 2015 will continue to be as bad, if not worse, as more sensitive transactions occur in the digital realm.

While cybersecurity insurance cannot protect businesses from hackers, it can help lessen the sting of a potentially costly aftermath.  On top of any direct financial loss incurred by a cyberattack, corporations often find themselves shelling out more money to fight lawsuits brought on by customers victimized by the attack.

As a Scott Godes’ article in The Corporate Counselor newsletter pointed out, a court refused to dismiss a class action complaint against Target Corporation brought by banks whose customers’ information was stolen. Though Target’s losses were somewhat offset by $90 million in insurance recoveries, the corporation is still on the hook for tens of millions of dollars in uninsured losses. Additionally, Target’s cybersecurity insurance has a reported “50 million sublimit for settlements with  the payment card networks.”

Before business owners purchase (or renew) any insurance policy, it is important to examine and evaluate the program to make sure the policy fits their needs.

Business owners should not assume that any loss suffered from a cyberattack is covered under their general liability policy.  According to the National Association of Insurance Commissioners and the Center for Insurance Policy and Research, the terms and conditions of a Commercial General Liability Policy may not cover issues arising from a data breach, including liability for security breaches, the cost to notify customers of a privacy breach and the costs associated with restoring and replacing electronically-stored assets.  A cybersecurity policy is most likely needed for financial protection in such instances.

As businesses continue to perform more transactions online, and as hackers are increasingly becoming more sophisticated in their methods, it is advantageous for employers to think long and hard about the value of cybersecurity insurance.

Of course, purchasing cybersecurity insurance does not equal a safeguard from hackers. To reduce the risk of a cyberattack, businesses should consistently update their firewalls and antivirus software, talk to employees about the dangers of clicking on suspicious links, and conduct regular audits of their IT infrastructure.

 

To download the report from Ponemon Institute titled “2014: A Year of Mega Breaches,” click here.

 

 

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Kevin Burke

Kevin Burke is a partner in the Litigation, Labor & Employment Practice Group at Lippes Mathias Wexler Friedman LLP. EDUCATION: J.D., George Washington University Law School Georgetown University - B.A., magna cum laude Nichols High School School (Buffalo, New York) EMPLOYMENT: Lippes Mathias Wexler Friedman LLP - A partner in the Litigation Practice Group INTERESTS: Member, Nichols School Alumni Board Past Board Member and Officer, Western New York Trial Lawyers Association Bennett High School's Law Magnet Program Bar Association of Erie County Annual Mock Trial Tournament Attorney Coach Past Member, Kiwanis Club of Buffalo Past Member, Child & Family Services Annual Fund Board Leadership Buffalo Graduate, Class of 2006

Could out-of-state rulings on non-compete agreements hurt your business?

Could out-of-state rulings on non-compete agreements hurt your business?

Although admittedly disfavored by the courts, non-compete agreements remain a powerful tool for New York businesses concerned with protecting their proprietary information and resources. One way New York employers can increase the likelihood of enforcing their non-compete agreements against would-be competitors is to select an appropriate choice of law provision.

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