There are a lot of things to deal with as a business owner, and the fear of a lawsuit is one of them. It is a litigious society, and even small mistakes can lead to a lawsuit.
Lawsuits can come from a variety of sources, such as vendors, clients and employees. Although it is not possible to prevent all lawsuits, there are things owners can do to minimize the risks.
Perform systematic reviews
According to Money Crashers, it is a smart idea to evaluate personal and business practices to see if there are any weak areas that may increase the risk of legal trouble. Review contracts, employee handbooks, action plans for disputes, etc.
Transfer risk and assets
Make sure the right protections are in place to minimize the risk of a lawsuit. Purchase adequate insurance, which will vary depending on the specific business. Examples include personal liability, errors and omissions, professional liability and malpractice. Certain types of companies may also be able transfer the assumption of responsibility to the consumer.
If there are few to no assets, someone is less likely to sue. Leverage or transfer assets to minimize risks.
Treat employees right
It is common for disgruntled employees to sue, and Inc. discusses some areas in which to be extra careful. Paying appropriate wages is a necessity to avoid legal action. Classify workers correctly, pay for overtime, pay at least minimum wage and allow for appropriate rest and meal breaks.
Understand the law in regard to medical leave. Federal regulations allow for 12 weeks off while securing health benefits and job protection.
Companies must also have policies in place that protect against discrimination and harassment. Avoiding these practices and understanding employees’ rights will go far to keep lawsuits away.
