Few things can strike fear into the heart of the small business owner as effectively as the threat of a lawsuit. Small businesses need to do everything in their power to prevent lawsuits from coming about. There are common-sense steps to take that can help you avoid getting sued. What follows are simple actions that you can take toward this goal.

Make Sure that Your Contracts Protect You

The contracts that you enter into for your business should be properly drafted to offer protection to you and your enterprise. You need to make sure that you have a lawyer qualified to practice in your state create well-thought-out contracts for you.

A good contract can be a kind of insurance policy for your business. As an example, when you have a contract that makes sure that your clients can’t sue you for missing a deadline in the event of a storm, it protects you. Not even the best contract can protect you against every kind of situation that may come about, however. It is for this reason that the next idea makes sense.

Related: 5 Reasons Your Business Shouldn’t Copy the Language in a Legal Contract Another Business Uses

lawsuits Keep a Lawyer on Retainer

Retaining a business lawyer on an ongoing basis can be a way to save time and money. Such lawyers apply their knowledge of legal challenges, contracts and insurance policies to create well-written contracts, and offer you advice about compliance measures where needed. In the event that you are faced with a lawsuit, your counsel will have the knowledge of your company that they need to defend you adequately.

Maintain a Policy of Thorough Documentation

Your clients or employees are far less likely to bring a lawsuit against your company if you have clear policies and procedures in place. Maintain an updated employee handbook that documents how workers should handle predictable situations. It can instruct employees in how to deal with unfair treatment in the workplace, for example. Preparing to handle complaints can be an excellent way of preventing lawsuits by employees.

Treat Your Clients Well

Clients who feel fairly treated are not likely to sue. If your clients see your company treat them well and deliver great service most of the time, they aren’t likely to be inclined to sue when things go wrong. It can also help to train your employees in ways to calm down unhappy clients, and de-escalate difficult situations.

Finally, it’s important to invest in liability insurance for your business in the event that you are sued. Insurance of this kind can help you meet the expenses involved in lawsuits when they occur. From employee discrimination to injured visitors at your premises, insurance can help protect you when your efforts to prevent lawsuits fail.

It can be an unwelcome burden to have to make room in your budget for the things that you need to invest in, to avoid lawsuits. Everything from a lawyer’s retainer to a properly updated employee handbook is money out of your pocket. These items are critically important to provide for, however. A smooth entrepreneurial experience is the reward that you get for thinking ahead.


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