Setting up a business successfully, and maintaining its smooth running can be exciting. But, it’s also easy to miss out on the possible risks associated with owning a business.
Undoubtedly, no one wants to imagine the mayhem that may come with your enterprise being sued. Small business statistics in 2021 point out that 36% to 53% of small businesses get sued yearly. And, 43% of all small businesses experience threats with a lawsuit each year.
Think about when your primary source of income is cut short, and you have nowhere else to rely on your earnings. Imagine how your family can suffer in case your lost business was the main income stream towards sustaining your family’s welfare.
Indeed, it can be time-consuming to learn the right business practices. But, ignoring this step can be disastrous to your business progression and success. Many businesses that end up sued are those that did not plan for potential risks, which could cause problems down the line.
As an entrepreneur looking for smooth running and overall success of your business, you must match up to the game. Take every responsibility within your means to cut off the risk of tarnishing your organization’s name. Avoid the possibility of losing your venture altogether by learning how to safeguard it from lawsuits.
The reality is that; no one can take full control over every happening. But, there are things within your limit that you can take charge of. Our article delves deeper to give you tips to protect your business from lawsuits. Let’s discover more below.
1. Always Have Experienced Corporate Business Lawyers At Hand
Lawyers who can work with businesses from diverse industries are a valuable resource. Anyone in business needs to seek the help and advice of competent corporate business lawyers before taking any significant step. The legal expert will help by recommending the right actions you need to take to avoid the chances of being sued.
Thus, anytime a legal issue arises in your business, having expert corporate business lawyers at hand will save you the potential loss of your venture. They will always step in on time to offer the help you need.
If you’re a start-up, you’ll scale the heights of business without fear. In this case, you can quickly consult the business corporate lawyer on important matters at any time.
They get to offer the answers you need for your urgent questions. Remember, the top corporate law firm has the right expertise to guide you right in preventing your possibility of going down the path to a lawsuit.
Once you’re in crisis and you do not have a business lawyer at hand, things can quickly get out of control. Before you run up and down trying to find the right attorney, you may end up finding yourself under tough legal action.
Perhaps it’s an issue to do with an employee, your suppliers, or even customers. No matter what may come, finding reputable and experienced corporate business lawyers in advance will help you remarkably.
And, even if there’s no issue, the business attorney ensures you remain in compliance with the law. They also help you spot possible legal issues early.
Maintain Legal and Accurate Records
In business, maintaining accurate records is important. It helps outline the expectations of every party and safeguards you in line with those expectations.
Also, putting all your business agreements in writing and maintaining accurate records is a lifesaver for business. In case you get sued, it helps you in resolving disputes and clarifies the rights and duties of every party involved.
Your business records should include the following elements:
- The full scope of duties to be performed, including all supplies and deliveries.
- Work timeline, including, exact due dates for each activity. Put down everything that you want to be enforceable.
- Payment amounts, terms, and conditions. For suppliers, how long will it take for the person to get payment after delivery, and what will the mode of payment be?
- The circumstances through which the business contract can be terminated and how to handle the whole process. In case of dispute mediation, state how that becomes necessary, and how it will take place.
- If mandatory, one or both parties can include a non-compete or non-disclosure clause.
- Terms and conditions related to failed business obligations. For example, if the payment isn’t dispatched by a particular date, the records should state what will happen.
3. Safeguard Your Business Reputation
Can you imagine the jeopardy of losing a 10-year-old business to a 30-minute instance of reputational issues? You end up sued and again lose your income source. Well, your organizational reputation is life to your business.
Based on the World Economic Forum, a quarter of an organization’s market value is directly linked to its reputation. 87% of executives believe that reputational challenges are more crucial than other deliberate risks. Indeed, this is not something any business owner can ignore.
Businesses get sustained by the public image, that’s why it’s fundamental to exercise integrity in all of your enterprise’s dealings with:
- The community at large.
If you promise to do something, ensure you do it. Breaking the rules or representing a negative image of your products, services, or business at large can cost you much.
It can lead to losses, and you also get haunted in the form of:
- General mistrust
- Business closure
- Possible lawsuits.
Prioritizing honesty and integrity while operating your venture will give your business a good name. And, if you’re a business startup, it lays an excellent foundation for your business to flourish.
4. Seek the Right Insurance Coverage for Your Business
To also lower the financial impact of a possible lawsuit, it helps to seek insurance coverage. For example, you’ll find those will cover many risks for your small venture, including claims linked to physical injuries such as slips and falls, or property damage.
Insurance can also help safeguard your business and employees against liabilities related to auto accidents. So, depending on the type of venture you’re in, you can determine the right insurance coverage. For instance, an enterprise offering professional services or advice to clients can seek professional liability insurance.
This can help cater to the cost of defending your business in case a client files a case claiming damages that resulted from an error related to your services. Hence, with special insurance cover, it becomes much easier even for the corporate business lawyer to negotiate on your behalf.
The one thing any business owner would never wish to hear is that their business is being sued. Handling such a nightmare can be traumatizing. Lawsuits can be too expensive in terms of costs, time, effort, and your overall business reputation. And not forgetting the psychological stress that comes with all that is involved in lawsuits.
Here, you’re not sure whether your clients will ever trust your venture again. Worse still, you do not know if this will mark the end of your business era. Well, to avoid all these anxieties, it helps to align your business right and do everything you need to cut the risk of a business lawsuit.
This is the best reward you can give yourself and your business. So, ensure you set your business on the right footing and work best to maintain a good public reputation. Always have the right business corporate attorney by your side.
They’ll always come through for your situation, in case anything unexpected happens, and it calls for legal action. Also, remember to always sign business agreements, and maintain legal and accurate business records. Do not forget to seek the right insurance coverage for your business.