Business Protection 101: How to Protect Your Business from Lawsuits & Injury Claims

Every year businesses fork out hard-earned cash as a result of lawsuits. With more Individuals becoming more aware of the law and their rights, you have to protect your business from being the center of a lawsuit.

As a business owner, you may face lawsuits from clients, employees, and vendors. It’s important to know how to protect yourself when the threat of a lawsuit arises.

In some instances, the individual filing the suit against your company or threatening to do so is hoping that you’ll agree to a settlement outside of court. To avoid these as well as to know how to properly handle a lawsuit you need to be aware of business protection strategies.

Getting sued can damage the reputation of your company. Continue reading to learn about useful business protection strategies.

Types of Lawsuit that Your Business Could Face

There are several types of lawsuits that a business can face. This means you need to have knowledge of each of them so that you don’t get caught up in them. Let’s take a look.

Faulty Products

Your product could be the reason behind your client’s injuries due to a fault that occurred during production. Your client could then sue you for the injuries that they have sustained.

Slip and Falls

Due to negligence on an employee’s part, your customer or another employee could slip on a wet floor. If you had no wet floor signs on display, a customer can then sue you for negligence and damages.

Premises Liability

If you fail to properly secure your property and it results in an employee or a client being assaulted or even killed, then you’re likely to face a lawsuit for negligence.

Work-related Vehicle Accidents

If in the process of carrying out duties on behalf of your business your employee injures someone you may be sued. Since the employee was representing your company, that could result in a lawsuit against you.

You should also consider that if an employee is injured on the job or while doing work-related activities then you’ll be responsible for wages and medication. These are normally covered in your workers’ compensation insurance policy. If not, then that’s a brewing lawsuit.

Consider too that if you fail to honor the terms outlined in a contract between you and another partner then they can file for damages. These are just a few of the lawsuits that could be levied against you. Here is a shortlist of the others that are not often discussed.

  • Intellectual property infringement
  • Employment discrimination
  • Customer discrimination
  • Harassment claims

Based on the laws of your state, cases with damages between $3,000 to $10,000 will be tried in a small court. Those with higher damages will more than likely go to a state court. If federal law or the Constitution was breached then the matter will be dealt with in a federal court.

Business Protection Strategies

Now that you have an understanding of the types of lawsuits that you could possibly face as well as which court the matter could be tried in, let’s look strategies that you should use to protect your business against lawsuits:

Extraordinary Customer Service

Extraordinary customer service is crucial in avoiding lawsuits. Always ensure that your customer service is outstanding and that your products and service are of the highest caliber.

Disgruntled and unsatisfied customers will be the ones who file the most claims. You have to ensure that you efficiently and proactively resolve their complaints. Try to go above and beyond to meet their needs. In addition, ensure that your property is sufficiently secured and that your employees are trained not to discriminate against anyone.

A Good and Detailed HR Policy

Foster a culture that goes against harassment and discrimination. Have these properly outlined in your HR policy and in a handbook for employees. Also, do sensitivity training for all members of your company.

Ensure that you conduct a proper hearing before any dismissals and for any disciplinary matters or breaches. In addition, have a procedure that fosters complaints to be made.

Always ensure that your staff wages are as stipulated legally and that they are fair.

Hire A Good Attorney

When you are starting up ensure that you get an attorney on board. This attorney can advise you when legal claims arise.

Be sure to get an attorney who is very familiar with the local laws of the area where your business is located. If you can retain an attorney for your company then do so.

Get the Right Insurance

As a business owner, you should have liability insurance. This is good for lawsuits such as slip and falls. Ask your Insurance agent about errors and omissions coverage as well.

The type of insurance you get should directly relate to the business you are in. For example, a gas station owner would need to buy petrol station insurance. Whenever possible try to get industry-specific insurance.

It’s also good to have protection in your contracts. An example is exempting yourself from blame if you’re unable to fulfill a contract during an act of nature. Get your lawyer involved and find the best way to include such terms in your contract.

Be Mindful of Your Actions and Words

Be sure to avoid questionable business announcements. Be very mindful of who you conduct business with as well.

Always follow your company’s code of ethics. In business something you do or say can come back to haunt you in court if you are not careful.

Prevention is Better Than Cure

It’s highly likely that you’ll face a lawsuit during the course of your business’s operation. The key is to follow key business protection strategies to limit these. If you do get sued always consult a lawyer before doing anything.

Knowing the types of lawsuits also helps you to understand what you’ll be dealing with and to be prepared. If you would like more business advice, please visit the business section of the website.