Issue link: http://read.dmtmag.com/i/464194
26 Oil Prophets LEGAL CORNER Several years ago I did an article on the topic of protecting your assets and because this is a frequent topic of questions from clients, I thought I would re-visit it. The client's question usually is, "Should I have one corporation or two? Should I separate my wholesale from my retail? Should I put my transports in a separate corporation?" etc. The issue, and ultimately the answer to these questions, is driven by the desire to identify the major risk exposures in your business; your assets associated with those risk exposures; and segregating or separating those exposures. So to start the process, you need to ask yourself, what are my greatest risks in my business? Put differently, what are my risk exposures that can put me out of business? In the gasoline/ convenience store industry, I would identify those risks to include the following: 1. Liquor liability 2. Liability associated with operating fuel transport trucks 3. Environmental liability 4. Other retail store exposures such as a customer being injured or killed in a robbery There are obviously endless other exposures your business faces every day, but I see these as the ones that create the greatest exposure and, therefore, the greatest risk to your assets. All of them are insurable in one way or the other, but that leads into how much insurance is "enough." Liquor Liability. These risks arise principally from selling alcohol at retail to the public. The greatest exposure which we identify in Alabama as "dram shop" liability occurs when a retail sale is made either to a minor or to someone who is visibly intoxicated and that person then gets in an automobile and has a wreck either injuring or killing passengers in their own vehicle or persons in other vehicles. Alabama has certainly seen its VKDUHRIVLJQL¿FDQWGUDPVKRS jury verdicts over the years. I am often asked how much liquor liability insurance should a C-store operator have. That is certainly a question you have to decide based on what makes you "comfortable," and thus will allow you to sleep at night. Whether you operate one store or 50 obviously affects those decisions as well. It is also a question you should ask your attorney and CPA. Transport Liability. I can tell you generally that PDQ\SODLQWLIIV¶¿UPVDURXQG the country are starting to specialize in big truck liability. There are plaintiff's lawyers in Alabama that do nothing else. The reason is big trucks create big problems on the highways, DQGWKH\RIWHQKDYHVLJQL¿FDQW insurance that the lawyers can go after. Add to those already existing exposures with big trucks on the highways, the fact that we are hauling petroleum products exponentially increases the risks. These risks are not only from the wrecks or explosion possibilities, but also from environmental impact issues. Again, all of these risks are insurable, and you have to decide what levels of insurance you can live with. Environmental Liability. In Alabama we are so very IRUWXQDWHWRKDYHD¿QDQFLDOO\ sound tank Trust Fund that SURYLGHVVLJQL¿FDQWOHYHOVRI LQGHPQLW\EHQH¿WVFXUUHQWO\ PLOOLRQGROODUVWRDVVLVW eligible tank owners in paying for the cost of cleaning up PROTECTING YOUR ASSETS H. Dean Mooty, Jr. Mooty & Associates, P.C. 1. 2. 3.