5 Ways to Effectively Prevent Your Small Business From Being Sued

Our legal system is somewhat unique in that anyone can sue for anything at any time. Of course, if their lawsuit has no basis, it could get tossed out of court or it might backfire in the form of charges for filing a fraudulent or frivolous lawsuit, just for example. But when people feel they have been wronged, there is nothing to stop them from filing suit against your company if they feel you’re to blame. That said, there are certainly ways you can work to prepare for lawsuits, protect yourself and your business, and even prevent them in the first place. Here are some tips to get you started.

  1. Don’t break the law. This sounds pretty obvious, but it might not be as easy as you think. For example, what if one of your employees steals credit card information from clients and goes on a spending spree at their expense? What if you discover that your waste disposal process is breaking environmental laws that you didn’t even know existed? Or you get pegged for operating without appropriate permits and licenses? What you don’t know can definitely hurt you when it comes to legal issues concerning your business. And if you don’t put policies and programs in place to protect yourself, your staff, your customers, the environment, and so on, you may be breaking the law without your knowledge, which makes you no less guilty or responsible. Of course, you should also avoid breaking the law on purpose and with full knowledge of what you’re doing.
  2. Secure appropriate insurance. Whether you’re providing your employees with health benefits, you’re insuring your property against damage and loss, or you’re getting liability coverage and workers compensation plans to ensure that anyone injured on your property or on the clock is taken care of, paying for multiple insurance policies up front could definitely help you to avoid lawsuits in the course of your business operations.
  3. Practice safety first. If you run a warehouse operation where heavy machinery is used and a wrong move could result in serious injury or death, you obviously want to make safety training, safety gear, and following safety procedures mandatory. But what if you manage an office building? Here, too, you’ll want to make sure that employees know how to behave. Some of the most common injuries result from slips and falls, which can happen anywhere. But you also need to make sure that your employees are trained to avoid giving out personal information about staff or clients, that you have the security programs in place to protect sensitive data, and that you use an appropriate level of security in your building (alarm system, surveillance cameras, security guard, etc.) to keep your office and your workers safe.
  4. Use contracts. Any time you’re doing business it’s important to have contracts in place. They could pertain to employee hires and include NDA agreements, just for example. Or they may be used to make legal arrangements with vendors, clients, partners, and so on. You may even have a contract of sorts with customers, depending on the type of business you own. Contracts are in place to protect you in the event of lawsuits, but mainly to prevent them from happening in the first place.
  5. Keep an attorney on retainer. If you want to protect your business from legal issues, the best way to get started is by hiring an attorney or law firm to advise you and provide you with legal protection. This professional can not only help to ensure that you have all your legal ducks in a row upon launching your enterprise, but that you understand changing laws that may affect you and that you have access to all of the information you need to remain in compliance moving forward. And if you do end up in a lawsuit, you’ll already have an attorney that is familiar with your business to help you out.

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