A lawsuit is expensive for any business. It might cost you your reputation, and reduce your likelihood of business continuity. You wouldn’t want all your hard work and reputation to be thrown out the window for being on the wrong side of the law. As a small business owner, you need to protect your venture by any means possible. You likely don’t have lots of cash to pay compensation fees. The best you can do is minimize legal risks that will jeopardize business operations. Here are some proven ways to protect your small business from common lawsuits:
Separate your company finances
For starters, you need to be wary of how you run your finances. Running your business as a sole proprietorship is easy and cost-effective. In fact, it is the most preferred option by entrepreneurs. However, if your business is sued, your assets and belongings will be the first target in court. Ensure you separate yourself from the business by registering it as a limited liability company.
Act and speak with caution
If you do business with shoddy people and they end up being exposed, you could go down with them and fall victim to lawsuits. You also put your business at risk when you make public statements that others deem questionable. Watch what you say and do and avoid situations where you conflict with your interest.
Obtain a liability insurance
General liability insurance can cover property damage, bodily harm, and copyright infringement claims. Auto insurance can cover your business from liabilities due to driving-related accidents. Talk to your insurance agent and find out the best insurance cover for your small business.
Hire a top business attorney
Your top priority as you start your small business should be to hire a reputable business attorney. According to a top Edmonton commercial lawyer, a good business attorney can provide you with legal counsel to avoid common pitfalls. The lawyer will also guide you on the best course of action in the unfortunate circumstance that you are sued. It is good to hire an attorney who is well-versed in matters concerning the local laws. Ensure you only work with a business lawyer who has a track record helping small businesses in your locality.
Ensure you put everything in writing
After every agreement and transaction, ensure you put your agreement into writing. If you get too used to handshake deals, you leave room for misunderstandings which can quickly lead to lawsuits. These written agreements have proven to be life-savers for small businesses and provide clarity if one of the parties involved tries to start an altercation. If you have made a verbal agreement, ensure you follow up with an email to summarize the terms of your agreement.
Adhere to strict employment practices
Violation of any employment laws such as harassment or discrimination could lead to a hefty lawsuit. Ensure you know the employment laws that apply to you and erect policies that will keep you in line. You could also consider hiring a good human resource manager to help you handle employment matters.
Encrypt and back up your files
Most modern-day businesses use computers to automate data entry and store their files. However, if your systems got hacked and sensitive customer information was leaked, you could face a costly lawsuit. Ensure you back up all your files and have a robust security system for your business computers. Invest in top cybersecurity defense strategies to protect your business.
Nobody knows what tomorrow holds. The pandemic is one reminder that it is impossible to predict all the eventualities in business. However, one of the best things you can do for your business is doing your best to protect it from common threats like costly lawsuits. Work with a top business attorney and other professionals to help take good care of your business.