Avoiding Small Business Lawsuits: 5 Tips from the Experts

how your small business can avoid a lawsuit
Nobody wants their small  business to be involved in a lawsuit. Lawsuits are time-consuming, scary and can be very expensive.

Unfortunately, the reality is there’s no sure-fire way to avoid having a lawsuit filed against your small business. People will sue for almost anything these days, as the 1992 McDonald’s hot coffee case proved.

Nevertheless, it’s important to take the necessary steps to protect your small business and help lower the odds of a lawsuit from occurring. Here are some pro tips you can follow to make it less likely:

Tip #1: Put it in writing

Whether it’s an email or a more formal document, always put any agreement in writing. At a minimum, the agreement should list the products or services to be provided, price and delivery date.

Tip #2: Follow through

Make sure you do what you say you will do. If, for some some reason, you aren’t able to follow through on a deal, make sure to communicate with the client as early as possible and keep a written record of your communication.

Tip #3: Partner with a lawyer

The law can be tricky. And it varies by state. Make sure you have a good small business lawyer you can call if you run into legal trouble or have a question about the proper way to handle a situation.

Tip #4: Know your employment laws

If you break a law, even if you didn’t know about it, it can mean big trouble for your small business.

To avoid running into legal trouble, hire an employment lawyer or HR consultant to write an employee handbook and to help you learn what laws apply to you and your small business. Follow these laws to a tee, or risk a lawsuit.

Tip #5: Get insurance

A good small business insurance agency can direct you on what insurance you need to decrease your liability. Insurance companies can reduce the risk you have from being sued. They are experienced in investigating and paying claims.

For more more information on protecting your small business, check out our Small Business Knowledge Center or contact MaxFilings for professional business formation and management consulting services.

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