Small businesses can be fragile. A single, unexpectedly large expense can wreck them for good. One potential source of such an expense would be a lawsuit. For example, your delivery truck gets involved in an accident. You suddenly have a truck accident lawyer filing a lawsuit against you on behalf of the victims. Paying off the suit or even fighting it can potentially eat into your company’s finances. Take steps to protect yourself from legal liabilities to ensure your business can thrive.
Always Have a Business Attorney
The best defense against a lawsuit is to have the right legal advice. Hiring a lawyer for your business should be one of the first things you should do. They can prevent lawsuits simply by giving you advice on what to do. For example, work contracts need to be airtight when it comes to liabilities and responsibilities. With an attorney, you can have them look over everything that you sign so that your business won’t get caught in a legal trap. Additionally, they should be responsible for creating your contracts so that you are protected from liability.
For any major moves a company makes, you need to consult with a lawyer before it happens. This can help ensure that everything you are doing is legal. With a lawyer on retainer, you will also have less to worry about when it comes to emergencies. You will have an immediate response to any lawsuits and legal challenges with their help.
Keep Accurate Documentation
A good business makes it a habit to document everything that is happening. Every contract signed, every sale finalized, should all be stored in a secure room. The accurate records are very useful when it comes to proving whether you are liable or not for something. But this goes beyond written contracts.
You need to have documentation of meetings and what happened during them. Avoid additional liability issues; you can negotiate with clients and any agreements made with them has to be recorded. This ensures that they can’t later claim that you broke your word and sue you. For example, you and your client agreed that you would provide them with a specific service. They might think that they are entitled to more, so they might threaten you with a lawsuit. Accurate records ensure that if someone uses this tactic against you, you have proof that
Follow The Right Processes
Many lawsuits come from violated procedures. For example, a person might sue you because they feel that you were responsible for their current condition. You can easily avoid liability if you did everything right. Prove that you were not neglecting your responsibilities and the judgment can be that you are not liable at all.
For example, when you run a manufacturing company, and an accident happens, the injured parties might think of suing you. If you did everything right, then you should have no problem. Doing your best to discharge your responsibilities means that someone else is at fault for the accident or that it was beyond anyone’s control. Don’t hesitate to invest in proper training and added safety measures since they are much cheaper than paying out a lawsuit.
Get Liability Insurance
Sometimes, the people filing a lawsuit have a point. Accidents happen, and you need to pay off the victims. Instead of dipping into your funds, you should have another source of money. This is where liability insurance comes in. With it in place, you will have fewer worries about how to pay off these bills. The liability insurance doesn’t just cover the payout. It will also handle the legal fees for any lawsuit that happens.
Accident insurance is popular, but there are other liability insurance packages out there. For example, an errors and omissions package is great since they help companies that have been sued for making mistakes or for not meeting quality standards. Another popular insurance choice is the Directors and Officers (D&O) Insurance. This helps protect you and other company managers in their legal fees when they are accused of wrongdoing like negligence, discrimination, and more.
If you are a small business, some of these insurance plans can have a huge premium. Getting general liability insurance is a good alternative since it covers most of the compensatory and general damages during a lawsuit.
Being the target of a lawsuit is not a fun experience. If you can prevent it from happening or at least minimize the damage it causes, then it can be worth the effort. Work with your lawyer to iron out what you need to do. When you’re done, you should be confident that you won’t be facing lawsuits that will bankrupt your business.