Don’t Get Sued: Ways to Protect your Business From a Lawsuit

You’re probably more worried about attracting new customers and revenue than a possible lawsuit if you run a company. But all businesses can get sued, so don’t ignore the possibility. 

Business managers constantly have their hands full. Between developing new products, maintaining a positive brand image, marketing the business, and managing staff, they likely don’t consider the possibility of getting sued. Sadly, lawsuits against businesses are quite common, and the threat of litigation affects companies across all sectors. 

If your company gets sued, it affects your bottom line and damages your emotional health and reputation. The impact of a lawsuit goes beyond the financial effect because it’s unpredictable, time-consuming, and stressful. So, it’s smart to do your best to decrease the chance your company ends up in court. This article provides some recommendations on how to protect your business from lawsuits. 

Why do businesses get sued?

It’s vital for your business to protect itself from the devastating effects and crippling expenses that could result from an unfavourable decision. But in order to come up with ways to protect your business from a lawsuit, you need to know what factors could trigger one. 

Problems regarding intellectual property

If you use an idea, photo, or copy something another business created, even accidentally, you can get sued for copyright infringement. Ensure that everything you promote as coming from your business is 100% unique and doesn’t resemble something another business or individual did. 

Harassment

Big corporations have comprehensive HR guidelines and practices they highlight during training and ensure everyone meets them to ensure that their staff understand how they should behave and what consequences they face if they fail to do it. It’s crucial to take any allegation of harassment seriously and address it properly to avoid a lawsuit. Encourage your employees to contact your human resources department whenever they feel someone didn’t act appropriately in relation to them. 

Discrimination

You cannot ask questions about the candidate’s sexual orientation, race, religion, or gender during the recruiting process. Check with a recruiting expert if you don’t know what questions are legal to ask during an interview. 

Workplace injuries and property accidents

No workplace is safe from injuries, but it’s paramount to evaluate your headquarters’ safety to ensure there are no hazards to put your employees or visitors at risk. If someone gets injured on your premises, they can claim compensation, and if they are not happy with the amount your insurance company provides, they can sue you. The specialists from How To Sue provide information on what to expect from a personal injury lawsuit and offer guidance to victims. Also, if someone gets injured on your property, you may have to pay a hefty fine because you failed to create a safe environment. 

How can companies avoid getting sued?

Get insurance protection

Insuring your company doesn’t protect your business from being sued, but it can help you avoid financial issues in case of a lawsuit. In case of an accident or other legal issues, you can use the insurance to cover the liability costs and legal fees. However, before buying insurance, ensure you research the array of policies available on the market because you want to get one that covers as many instances as possible. You can go with general liability insurance that protects your business against multiple types of lawsuits. Ask your broker to help you choose one that would match your business needs best. 

Put everything in writing and keep your word

There are many handshake deals in the business world, but if you want to stay away from issues, you should put everything in writing to avoid misunderstandings that could lead to a lawsuit. 

Create documents for every operation, transaction, purchase, and business deal that provides information about every term of the deal. Most business managers avoid working with long formal contracts for each transaction because it takes time and resources to create them. If you also do it, make sure to at least have an email or other type of document that details the terms you agreed to. Hire a business lawyer to help you figure out the type of contracts you need for your business and teach you how to make agreements that won’t put you in any legal trouble. 

After you sign a contract, do what it says because you could face legal issues if you fail to do it. Being ethical and honest in your business dealings is crucial when trying to prevent expensive lawsuits. 

Hire a reputable legal expert

Having a legal expert who knows and understands the legalities of managing a company can help you stay away from lawsuits. Work with a reputable professional who has experience in assisting companies to avoid legal issues. They should be able to identify the possible legal risks your business is exposed to and advise you on what steps to follow in order to stay away from the court. 

Follow HR practices

Make your workers’ wellbeing and health a priority for your business because they’re the most valuable asset you have. Create a comprehensive employee handbook that provides clear information about workplace rules. Make it clear for everyone that your company doesn’t tolerate inappropriate behaviour or harassment. Also, create guidelines on how your employees should complete particular tasks to prevent injuries and report risks when identified. The key to creating a safe work setting is to let your workers know your expectations and how they should act if an accident occurs. 

Keep accurate records

All reputable companies keep accurate records of their operations and transactions. Your records should include the time and date when agreements are signed and the subjects discussed during meetings. Document all transactions, emails, phone calls, and business meetings. Your business records should highlight the services you agreed upon with each business partner and client in case of litigation. 

Final words

Despite your best efforts, you may still experience a lawsuit. If this happens, consult a legal expert to help you identify the best course of action.