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Top 5 Steps to Protect Your Small Business from Lawsuits

by Olufisayo
Protect Your Small Business from Lawsuits

Litigation is a major concern in the United States, costing small businesses $100 billion each year. Companies are better off viewing lawsuits as a matter of when rather than if one will ever come their way. The associated losses are simply too damaging to ignore. Aside from the financial impact, your reputation can also take a major hit.

There are several things you can do to protect your small business from lawsuits. Here are 5 steps to consider.

Build a Safer Workplace

Personal injury lawsuits filed by employees and customers are one of the leading threats that organizations need to watch out for. Start by providing thorough safety training and education. This can involve:

  • Establishing safety guidelines and procedures
  • Hosting regular discussions and addressing any issues presented by staff
  • Performing fire drills and having safety inspections carried out frequently

You should also ensure that your premises are well-maintained to reduce the risk of slip and fall injuries, since these account for 28% of deaths in the workplace. Allocate specific areas for dangerous tools, materials, and chemicals. Clean up any spills, leaks, or puncture hazards as soon as possible and limit the presence of exposed wiring and cables.

  • Inspect and repair company vehicles
  • Close off areas being cleaned or renovated and put up warning signs
  • Keep housekeeping records and maintain an inspection schedule

Uphold Your Image

How the public and internal staff view your business can contribute to legal trouble. That’s why you need to perform due diligence when making announcements or enacting potentially questionable business decisions.

       

This includes avoiding slanderous statements and working with unscrupulous parties who are known for unethical practices. Limiting possible conflicts of interest is also a good idea. For instance, helping to pass an ordinance with the town council that benefits your company may be viewed negatively. Strive to appear honest and moral at all times.

Get Insurance for Your Business and Company Cars

Every business needs to obtain general liability insurance. Certain companies should get errors and omissions insurance to protect against claims relating to mistakes or failure to meet contractual obligations. Workers’ compensation and commercial property insurance are also worth looking into.

If you work in logistics or have company cars, you will need business vehicle insurane. As Brian White, a personal injury lawyer and founder of Attorney Brian White & Associates, PC tells us,
“It is critical that small businesses have the proper insurance to ensure that they don’t face major losses in the event that one of your drivers has an accident on the road.”

Separate Yourself

Many small businesses are operated as sole proprietorships. This can put your personal assets at risk in court. One solution is to have a trust take ownership of your company, which typically becomes the only asset that can be attacked. Incorporating is another solution.

Provide Great Customer Service

Finally, keep in mind that knowing how to effectively calm customers down in heated situations can mean the difference between continuing business as usual and facing a lawsuit. Properly training your staff helps to provide superior service.

       

While you can certainly reduce your risk of falling into legal hot water, the threat always remains. Having an attorney by your side is ultimately the best thing you can do to reduce potential losses.

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