Litigation prevention: Ways to protect your business from legal action
Running your own business is one of the most exciting and fulfilling moments of your life, and experiencing success is a proud moment that many entrepreneurs have experienced but not without facing the threat of litigation.
Getting sued is never fun but it’s something that comes with business ownership. It can be very time-consuming, expensive, and emotionally draining. In addition to that, it can completely ruin a business’s reputation.
Everything from slip and fall cases to contract disputes, over 100 million cases are filed against businesses every year and can start at $54,000 for a liability lawsuit. That’s why it’s so important to protect your business.
You can implement all the safety precautions every business needs to take but there will be situations that slip through the cracks where you still end up facing a lawsuit. That’s why Forbes states that your business will indeed face litigation… it’s just up to you, as the business owner, to protect yourself so that the legal action won’t be as damaging.
The moral of the story here is prevention. If you’re going to get sued, you want to at least be prepared for the courtroom battle. Here are some of the top ways to protect your business in the event you face legal action.
Preventive Measures to Protect Your Business Against Legal Action
Provide Impeccable Customer Service
One of the best ways to prevent legal action being taken against your business is to provide your customers with great customer service… This is the art of “nipping it in the bud.”
Your business will, of course, not be able to please every single customer but if you can manage to retain more happy customers than disgruntled ones, that is going to be your ticket to reducing your litigation risks.
Ultimately, customers just want to be heard whenever they have an issue with a business, not ignored. It when businesses ignore them or don’t take their complaint or concern seriously when they get so angry that decide to take legal action, whether it’s just or not.
You’re going to want to properly train your employees on how to handle upset customers and ways to empathize with your customers. You’ll be surprised how far a genuine apology will go with a customer when it’s a mistake on your end.
Get Your Business Insured
Obtaining business insurance won’t stop your business from getting sued but what it will do is cover legal fees and liability costs that come with business ownership.
The moment you become a business owner, your back is automatically up against the wall and you become a target to be sued. There are lots of insurance policies out there and most insurance providers give you the option to customize your policy based on the type of business you have, but a good foundation to build your policies on is with general liability.
General liability insurance protects your business against bodily injuries, property damage, and various other accidents. For a trusted general liability provider, check out Simply Business.
Write Air-Tight Contracts
Depending on the type of business you have, if you have to draft contacts as part of conducting business, you need to make sure your contracts are air-tight in describing the services you’re providing to a customer or client. Doing so will reduce your chances of getting involved in legal disputes.
You may want to consult with a lawyer on how to draft certain types of contracts you’ll be regularly using just to ensure you’re projecting everything you want to say and include in written format. One omission of a particular service can cause you to have multiple courtroom visits.
Make Sure Every Employee Has a Copy of Company Policies and Procedures
Customers and other businesses aren’t the only people who will potentially sue you… Your beloved employees can take legal action against you too, if they feel they’ve been wrongfully treated under your supervision.
Things like company manuals or employee handbooks are great ways to back your company policies in the event an employee tries to sue you over ill feelings of a particular disciplinary you had to give them.
When this happens, you’ll have backing in writing stating what your company policies are for that employee’s particular action that caused you to implement disciplinary action. In distributing these handbooks, go over it with your employees and then have them sign a document that states they’ve read it and agree to the terms.
This signed document will play in your favor when an employee tries to sue you for no just reason.
There’s no way to completely avoid getting sued but there are preventive measures you can take to reduce your risks and to win your case. Everything from business insurance to reviewing company policies with your employees, you’ll be able to run your business with confidence, and when you do happen to be faced with a litigation case against you, you’ll have the proper systems in place.