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How to Not Get Sued – 3 Tips to Protect Your Business From Legal Action

Estimated reading time: 2 mins

We are becoming an increasingly litigious society. Perhaps we’re taking our lead from too many unrealistic American films, and TV programmes and people have started to perceive legal action as a guaranteed way to get a free handout. Many disputes in the business arena end up in court, and as a business owner, you want to avoid this outcome at all cost. Some legal claims are fully justified, such as when a business refuses to pay its employees or causes harm to a customer through neglect or intent. However, we’ve all heard stories about customers successfully suing fast food outlets because their coffee is too hot or other examples of frivolous litigation. And this means that unfortunately, being in the right doesn’t always guarantee you a legal victory.

 If you are a small business owner, it is your responsibility to protect your business against litigation at all costs. You should do everything in your power to limit risk to your employees and customers while keeping your business running as smoothly as possible. 

Here are three easy steps you can take to prevent your business from being sued.

Look after your public image

In the modern age, anything a business says or does publicly could be under scrutiny. Saying the wrong thing or having a quote taken out of context could be disastrous for your public image. It would be wise for your business or its employees to refrain from making any questionable or controversial statements, and avoid doing business with disreputable parties. It goes without saying that all your business practices should be above board, particularly when it comes to health and safety and your finances, two of the most common reasons for businesses to end up in the courtroom.

Hire a lawyer

When starting up your business, it is a good idea to have some legal counsel on standby. This way, you can be sure to avoid any accidental breaches of the law, particularly useful if you are new to the business world. A legal advisor or lawyer can advise you on the steps to take if you are sued and how to stay out of hot water in the first place. 

Get the right insurance

When it comes to protection, nothing is better than a comprehensive insurance policy. The right policy will depend entirely on the nature of your business. For example, business insurance for attorneys will be entirely different from a policy for a vegan street food vendor. Make sure you do your research and weigh up your options before taking out insurance. You should ensure you take out liability insurance, which will protect you if a customer or an employee sues your business. Again, it would be wise to get professional advice about the exact nature of the policy you need. While a particular policy may protect you from legal action if a customer slips and injures themselves in your place of work, it might not cover you in the event of a client suing you for not living up to a contract. 

Doing your research and seeking the best legal and financial advice is the best way to protect any small business from legal action.

 

About the author /


Simon is a creative and passionate business leader dedicated to having fun in the pursuit of high performance and personal development. He is co-founder of Applied Change, a Business Change consultancy based in the UK. Simon is also an Ambassador for Gloucestershire business. Simon is an Associate Member of the Chartered Institute of Professional Development.

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