How to Protect Your Business From Common Lawsuits

As an entrepreneur, it’s your responsibility to make sure that the business runs smoothly and is not affected by anything. One thing that can greatly harm your business is a lawsuit for tort liability. To avoid being a victim, here are five ways to protect your business from common lawsuits:

1. Monitor Your Actions and Words

You should be very careful when making public announcements or launching marketing campaigns. Always be honest with your promotions and avoid misleading advertisements. In addition, public statements should be respectful and avoid slander.

2. Institute a Sexual Harassment Policy

In your company’s sexual harassment policy, define what sexual harassment is, state that your business won’t tolerate such practices, talk about how your firm will discipline wrongdoers, include a procedure for filing such complaints, and outline protective measures for those who report such conduct. Gender shouldn’t be a basis for discrimination or irresponsible behavior; therefore, train your employees to treat each other with respect.

3. Have Personal Liability Insurance

Take up personal liability insurance to protect your personal assets from personal injury claims. You never know when an employee may decide to sue you for damages. For example, an employee can get injured at work due to their negligence, but choose to sue you for the accident. If you’re still in the process of building your commercial property, then take steps now to ensure that your construction company follows regulatory requirements for the structure. This will ensure that your property is up to code in terms of health and safety. Some additional precautions that you can take to avoid such a scenario are to section off dangerous areas and to install safety signs in places with heavy machinery. Ultimately, your business carries the duty to prevent personal injury for both the customers and employees on your premise.

4. Keep Your Files Safe

In the cloud computing era, it’s perfectly normal for your business to store information on the cloud since it minimizes costs and guarantees operational efficiency. However, before you select a storage system, ensure it’s safe to prevent the theft or misplacement of your client’s personal data and files. A customer can sue you for data breach and win if he or she discovers that you lost their personal information or it fell into the wrong hands.

5. Maintain Separate Accounts

You should not mix your business and personal accounts. An employee or an interested outside party can easily sue you for misappropriation of business funds if they discover that your accounts are not separated. Even if you don’t misuse company funds, it may be hard to support your claim due to constant withdrawals from your personal account.

Wrapping Up

Try incorporating the above strategies into your business operations to minimize costly lawsuits. Additionally, have a well-defined code of conduct in an employee manual to ensure employees know how to conduct themselves while at work. 

For more information on how you can secure your business against common lawsuits, or if you have any questions on how to handle a lawsuit that’s been brought against you, contact us now. At Lum Law Group we help our clients form and protect the businesses they’ve built from the ground up.