5 Ways To Safeguard Your Business From Getting Sued



In this litigious society, finding your business getting sued is not uncommon especially for  small businesses; customers, an employer or another business can cause you a huge burden. Being sued for any reason can prove to be devastating, resulting in financial impacts leading to big losses. There are several charges that can be filed such as negligence, injuries, discrimination, and other ranging from intellectual property infringement to contract disputes.

Lawsuits are usually expensive, disruptive and pitch your company deep into legal fees. It is possible however to avoid and prevent litigation with a few simple steps. Here are some of the ways to protect your business from a lawsuit.

1. Document Everything
Yay legal documents!









It is very important that your business keeps everything in writing; from contracts to employee documentation to memorandums of understandings. One of the reasons most business owners lose their lawsuits is attributed to their failure to keep the required documentation. In personnel cases, while verbal warnings are a good thing, your business still needs to document the date and time of any warnings. You can create the necessary documents such as written warning forms, violation or reason for termination. This way, if there are any disputes, then you can confirm with the accurate records of warnings and agreements.

2. Obtain the Right Insurance Protection

Every business should have liability insurance in case of any accident in your business place. Insurance provides you an easy way to deal with such unfortunate happenings and help you decrease legal risks. Even though insurances tends to be expensive, they are definitely worth getting. A good policy will include coverage for your legal defense costs and can also help you in dealing some of the miscellaneous costs that are involved with the legal liability. Insurance companies offer a variety of insurance policies for business owners including errors and omission coverage, personal liability coverage, general liability insurance and workman’s compensation insurance among others.

3. Hire a Lawyer

Look for a number of attorneys to interview in order to find an experienced and competent one for your business and contracts. The attorney is not only important in representing you in a court of law, but also gives you advice before you can take any action or react when you are sued. Your lawyer should be well versed with the laws and customs of your local area. You could consider hiring them on retainer so they will always be immediately available.

4. Create Easy Policies

Disclaimers and policies are very crucial tools that can help you avoid lawsuits, so make sure that your business has clear policies. It is very important that your employees follow these policies in their day to day activities. The policies should be easy to understand so that the set guidelines on reporting unsafe conditions, managerial hierarchy problems or employee hiring among other information is clearly understood. If your policies are clearly outlined, you will be less likely to experience irate customers and you will prevent uncalled for lawsuits. In case you are sued, courts will often make their decisions based on the “grey areas” by looking to your business’ policy manual.

5. Incorporate and Properly Register Your Business

Is your business registered properly? If you are not legally registered, it is important that you establish your company correctly to avoid unnecessary lawsuits. With your attorney, you can swiftly go through the registration process and properly establish your business. Additionally, instead of running your business as a sole proprietorship, consider incorporating as a Limited Liability company, a Corporation or S-Corporation. You will not require a lot of money to incorporate; many online services offer a simple step by step process. You will also skip the high legal fees by doing it yourself. Corporations function like a structural layer between you and those looking to sue you.


To protect your business from all sorts of problems, you will need to take everyone’s complaints very seriously. As an owner, you have the responsibility to protect your business and your assets in case you are sued. Allegations and innocuous concerns should always be considered as the possible causes for any lawsuit. If you fail to deal with any human drama, you will most likely land in a very uncomfortable situation. With the above five practices implemented however, your business should always be on the legal side.

Shawn Dsouza is a blogger for Reno DUI Attorney and he likes to contribute on various issues related to law and legal matters.

Photo Credits: Flickr Creative Commons Flickr Creative Commons


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