Liability Issues

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A Team You Can Trust!

Favour & Wilhelmsen, PLLC has been an integral part of the Prescott area legal community for over 45 years. You can expect exceptional legal representation from the initial consultation through the resolution of every matter.

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Understanding Small Business Liability in Arizona

Running a small business involves balancing opportunity with responsibility. From contracts to property and customer interactions, every decision carries potential legal consequences. Without proper protection, even minor disputes can lead to costly claims or lawsuits.

At Favour & Wilhelmsen, PLLC, attorney David K. Wilhelmsen helps Prescott and Northern Arizona business owners identify, reduce, and defend against liability. With more than 40 years of experience advising and representing Arizona businesses, Mr. Wilhelmsen provides practical, preventive strategies that protect your operations — and your peace of mind.

Law Insight — Understanding Business Liability in Arizona

Arizona’s liability laws recognize comparative fault, meaning responsibility can be shared between multiple parties. For business owners, this means even partial fault in an accident or claim can lead to shared financial responsibility. A well-drafted contract and clear policies can dramatically reduce exposure before any issue reaches court.

Types of Liability Small Businesses Face

Every business carries potential risks — even those that operate responsibly. Common forms of liability include:
  • Contractual Liability – Disputes over performance, payments, or agreements.
  • Premises Liability – Accidents or injuries occurring at your place of business.
  • Professional Liability – Claims of negligence or service errors.

Common Mistakes to Avoid

  • Signing client contracts without legal review.
  • Ignoring or underinsuring professional services.
  • Assuming your LLC automatically shields personal assets.
  • Waiting until after a lawsuit to call an attorney.

Avoiding these four mistakes can save thousands — and keep your business thriving.

Did You Know?

In Arizona, courts can “pierce the corporate veil” if an LLC or corporation is poorly maintained — meaning business owners can become personally liable. Proper documentation, separate finances, and annual legal reviews help preserve your protection.

Preventive Checklist: Reduce Liability Before It Starts

  • Review and update contracts yearly.
  • Keep business and personal finances separate.
  • Maintain active registration with the Arizona Corporation Commission.
  • Document all vendor and employee communications.
  • Update policies as your business expands or changes.
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Reducing Your Business Liability

Mr. Wilhelmsen helps business owners create solid legal and operational frameworks to minimize exposure:

Entity Structure

Select and maintain the right legal entity (LLC, corporation) for protection.

Contracts

Draft agreements that clearly define duties and limit liability.

Litigation Defense

If sued, Mr. Wilhelmsen delivers efficient, experienced representation.

Common Challenges for Arizona Business Owners

  • Confusion about what insurance policies actually cover.
  • Using outdated or incomplete contracts.
  • Commingling personal and business finances.
  • Failure to stay compliant with Arizona business filings.
Small mistakes in these areas can lead to major legal exposure — but preventive review and planning can eliminate most risks before they escalate.

Myth-Busting: Liability Misconceptions

“An LLC completely protects my personal assets.”

Only if properly maintained — mingling funds or personal guarantees can erase that protection.

“Small businesses don’t get sued.”

In fact, small businesses face the majority of civil claims nationwide.

“Independent contractors can’t sue me.”

Misclassification or vague contracts can still create liability.

“Doing nothing wrong means I’m safe.”

Even false claims require time and money to defend.

How David K. Wilhelmsen Can Help

With over four decades of Arizona small business liability experience, David K. Wilhelmsen provides hands-on representation for clients facing business disputes.

Preventive Legal Planning

Identifies risks and implements protective measures before issues arise.

Contract Risk Management

Drafts and reviews contracts that limit your exposure.

Liability Defense

Provides strong representation if claims or lawsuits are filed.

Local Expertise

Deep knowledge of Arizona business law and regional court procedures.

Direct Attorney Access

Every client works personally with Mr. Wilhelmsen from start to finish.

FAQ: Small Business Liability in Arizona

Use an LLC or corporation, maintain separate finances, and avoid personal guarantees.

Contract breaches, employee complaints, and slip-and-fall incidents top the list.

Yes — legal and tax risks often overlap; both professionals ensure full protection.

At least once a year, or whenever your business changes operations or hires new staff.

Advanced Certification

David K. Wilhelmsen received his certification as a Real Estate Law Specialist from the Arizona Board of Legal Specialization of the Arizona State Bar in 1991 for demonstrating advanced knowledge, skill and understanding in the practice of real estate law.

Experience

We have over 45 years of practice experience in most areas of Real Estate, Estate Planning and Probate, and Small Business law.

Local Practice

Established in 1947, David K. Wilhelmsen joined the firm in 1981 and has practiced continuously since then in the Prescott and surrounding communities.

High Martindale-Hubbell Rating

We hold AV Preeminent® rating by Martindale-Hubbell, which is given to attorneys who are ranked at the highest level of professional excellence for their legal expertise, communication skills, and ethical standards by their peers.

Responsible Solutions

We provide trusted and straight forward legal solutions to most matters you may encounter.

Benefits

Why Choose Us?

Employing Favour & Wilhelmsen, PLLC will ensure that your rights are protected, your obligations are clearly understood, and your interests are strategically represented. Whether navigating a complex transaction, resolving a dispute, or mitigating legal risk, we provide the knowledge and advocacy needed to avoid costly mistakes and strive to achieve favorable outcomes.

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Protect What You’ve Built — Before Problems Arise

Liability risks rarely announce themselves — they appear in contracts, daily operations, and even small decisions. With seasoned legal guidance from David K. Wilhelmsen, you can strengthen your protections now and focus on running your business with confidence. Contact Favour & Wilhelmsen, PLLC in Prescott today to strengthen your business’s legal foundation.

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