Businesses of all shapes and sizes are truly at the mercy of their customers and employees. At any point in time, your business could find itself on the wrong end of a lawsuit. Since the future is entirely unpredictable, it is pertinent to prepare for the worst-case scenario and hope for the best. It is your responsibility to decrease your risks, while simultaneously ensuring your business is capable of running smoothly. Hiring a lawyer is undeniably a good choice, but there are other precautions that can be taken to help reduce your risks. Below, you will learn how to protect your small business from potential lawsuits.
Use Words Cautiously
As a business owner, you are the face of your company. Anything you say or do will impact your company in one way or another. With this in mind, it is downright pertinent to use your words cautiously. Avoid saying anything that could be considered slander or libel. Simultaneously, you need to realize that you’re not the only one that could hurt your company. Your employees’ ethics are also very important. If you have an employee that behaves maliciously, it is pertinent to react immediately. Reprimand the individual publicly to ensure your business do not receive backlash for their behavior.
Avoid A Sole Proprietorship
It is also important to remember that the way you structure your business will help to determine the risk that you’re taking. Many business owners will opt for a sole proprietorship, since it is somewhat easier. However, this type of business structure is actually very risky. With this type of business, your personal assets could be put at risk in the event of a lawsuit. Allowing a trust to own the business is generally a good idea. Alternatively, you may want to consider incorporating your business and separating your personal and business finances. This will allow you to keep your personal assets even if you lose a lawsuit against your business.
Getting Insured
Insurance is a great way to decrease the risks involved. Even with insurance, the potential for a lawsuit remains. Nevertheless, your insurance will be able to provide you with support in the event that you’re forced to battle it out in the courtroom. Liability insurance and errors and omissions insurance are highly recommended. Both forms of coverage will go to great lengths to protect your company and help your company remain afloat, even if you are sued. If you work for a business that has a recognized board of directors, you should also consider securing a sufficient quantity of directors and officers liability insurance.
With this type of insurance, the personal assets belonging to the directors will be protected.
Carefully Compose Your Contract
Believe it or not, your contract can prove to be a great asset in terms of protecting your business and limiting your exposure. By working with a personal injury attorneys, you will learn how to structure your contract in a way that protects your business from personal injuries on and off of the jobsite. Make sure that protections are built into the contracts. Depending on the situation at hand, you may be able to use your contract to protect your business from incomplete work, missed deadlines and other potential problems. Hiring a lawyer to help you compose a strategically sound contractor is highly recommended!
Enlist The Help Of An Attorney
An attorney can prove to be enormously beneficial for various purposes. As mentioned above, they’ll be able to help you construct a contract that decreases your risks. At the same time, they can help you overcome certain legal challenges, including those brought forth by the Internal Revenue Service. Before you find yourself in trouble, it is essential to find a competent lawyer that will put in 100% effort to protect you and your business. Their assistance could prove to be the difference between going out of business and winning your suit!
Kidal Delonix is a contributor to Mr. Hoffman's blog. The views and opinions are entirely his/her own and may not reflect Mr Hoffman's views.
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