All of your carefully laid plans for business growth could be spoiled in an instant if you or one your employees is involved in a crash with a company vehicle. Even if the accident was another driver’s fault, you may not be safe from lawsuits, and may have to consider vehicle repairs or replacement, personal property damage, employee medical expenses, and higher insurance rates. If you’re on a tight budget, the results of a major traffic accident can snowball into a financial quagmire.
What to Do After a Car Accident
A few vital points you and your employees should know is:
- Never leave the scene of an accident – this is a crime in itself.
- Never admit wrongdoing, as it could be used against you.
- Call the police, and an ambulance if anyone is seriously hurt. This will help to provide credible records of the incident.
- Call your insurance company.
- Call a reputable injury lawyer who specializes in auto accidents.
A good lawyer, once informed of the circumstances, can give you proper advice on your obligations, options, and risks.
Negotiation between lawyers and insurance companies can go on for months. In the meantime, you may be looking at a need for vehicle repairs to keep your business operating. At the worst, you may be looking at a pending lawsuit. The average awarded for injury cases is $60,000 (http://www.statisticbrain.com/civil-lawsuit-statistics/), but that may not cover all costs. You need to start preparing yourself financially.
Regardless of who was at fault, if you’re expecting big bills, what to do after a car accident starts with reworking your budget. If you don’t have emergency funds available, it’s time to start collecting them. Go through your budget line by line and cut out or reduce any expenses you possibly can. You might also consider canceling any projects or vendor contracts you’re not legally obligated to fulfill, such as putting off upgrading your computer network, or cancelling non-essentials like landscaping or cleaning services.
Some more options might be selling off existing inventory, equipment, or other property that isn’t absolutely necessary. Another source might be a bank loan, which you may be able to secure with business collateral. One option is merchant cash advances, where you can “sell” unpaid invoices to a finance firm or broker.
They’ll collect the payments, keep their fee, and meanwhile forward you a check for the balance. It’s generally faster and easier than a traditional loan, and you can use the money as you like. You could also look into crowdfunding sources like Kickstarter, or peer-to-peer lending (http://finance.yahoo.com/news/what-is-peer-to-peer-lending-173019140.html), also called social lending.
Preserve Your Credit
If you have the credit, the easiest way out might be to take out a traditional loan to cover the expenses. If you have great credit, the interest rates should be low enough so that you should be financially secure for some time afterwards. However, many small or new companies don’t have that kind of credit.
That’s where your business negotiation skills can come in handy. Pay as much as you can with creditors, and try to reach an arrangement for an affordable payment schedule on the rest. Many organizations are willing to accept a payment plan so long as you’re honest and upfront about your financial situation. Paying on time could even help improve your credit score.
Paying off damages and expenses will also mean that you don’t have the funds for marketing or expansion that you had planned on. This would be a good time to focus on pleasing existing customers, scaling back, and perhaps expanding into related products/services that are less profitable but could still bring in revenue.
One mishap doesn’t have to be a financial disaster. Knowing what to do after a car accident will both help your company survive, and prepare you for the next emergency.