How Can You Prevent Your Business from Lawsuits?
Facing a lawsuit is every business owner’s worst nightmare, but it can happen. Lawsuits can tarnish a company’s reputation and cost thousands of dollars in legal fees. As a business owner, it’s important to do everything you can to keep your organization from getting sued. Here are a few tips to follow.
Put Everything in Writing
Whether you plan on getting into an agreement with an employee, client, or vendor, it’s critical to put it in writing. Otherwise, it won’t be enforceable in court. If a problem arises between your business and another party, you don’t want it to turn into a “He said, she said” ordeal.
Additionally, thoroughly read every contract and have a business lawyer review it. He or she will ensure that the contract reflects your company’s best interests.
Carry Proper Insurance
Just like you have insurance to protect your home and other personal assets, it’s wise to have insurance for your business. While insurance might not prevent lawsuits, it can protect your assets and save your business a lot of money. At the very least, you should obtain general liability insurance, which protects your business from claims that it imposed bodily harm or property damage to a person.
If you have hired employees, it’s essential to have workers’ compensation insurance. If workers get injured on the job, these benefits will cover their lost wages and medical bills.
Hire a Lawyer from the Beginning
A common mistake many business owners make is waiting until they’re facing legal trouble to hire a lawyer. A skilled business lawyer can provide you with sound legal advice and reduce your risk of disputes. If a dispute still arises, a lawyer can help you mitigate the amount of damage it does to your business.
Incorporate Your Business
If you don’t select the proper business formation, your business could face a higher risk of lawsuits. Businesses that operate as sole proprietorships have the highest risk of litigation because they are led personally responsible for the organization’s liabilities. A business lawyer can help you choose a suitable structure for your company.
Always Be Professional
When you own a business, you will sometimes have to make difficult decisions that not everyone will be happy with. To reduce hard feelings and the possibility of a lawsuit, always be professional and use polite language with everyone you communicate.