When it comes to the challenges faced by business organizations, lawsuits are perhaps the scariest for any company. They can be highly stressful as they cost time and money, both in terms of the expenses related to the lawsuit and final settlement to be paid if you happen to lose. Moreover, you will face business disruption and may even end up with reputational damage to the company. It makes sense to go the extra mile to prevent legal hassles in the first place. Fortunately, some common-sense steps have you covered if you are serious about avoiding lawsuits. Here are some actionable ideas that can help business owners steer clear of legal trouble.
Ensure that your contracts protect you
One of the most common causes of lawsuits is going slack with corporate contracts. Right from the inception of your business, you need to be extra conscious about the drafting of the legal agreements and contracts. Always have them drafted by a qualified attorney to be on the safe side because proper contracts are as good as an insurance policy for your business. For example, you can add a clause that the client cannot sue your company for missing deadlines due to an unforeseeable reason. Paying attention to contracts with employees, partners and vendors is equally crucial.
Pay attention to documentation
The possibility of facing a lawsuit by clients or employees is far less if you have well-documented policies and procedures in place. First things first, maintain an updated employee handbook to provide clear guidelines about how employees can handle predictable situations. Cover specifics such as car accidents in business vehicles and workplace injuries because these are common lawsuits that organizations face. After all, you would not want to end up facing a car accident lawyer only because a negligent employee injured someone while driving on duty. Similarly, you should also have procedures to handle client complaints and issues to prevent lawsuits.
Treat your clients well
This one is a no brainer as happy clients translate into a flourishing business. Surprisingly, it can also fortify your company against lawsuits. Clients are less likely to file against your business if you treat them well and serve them with an onset approach. It fosters trust and keeps them tethered with your company in the long haul. Even if things go wrong, they would rather want to sort things out instead of dragging your company into court. Training your employees and inculcating conflict-resolving skills is important as they can help in addressing issues and de-escalating difficult situations with the clients.
Have a lawyer on retainer
Another good move to steer of legal trouble is by retaining a seasoned lawyer on an ongoing basis. While having a lawyer or legal team may cost your business a bit, you may end up saving a lot of time and money in the long haul. Expert business lawyers apply their knowledge and experience in legal challenges to help you with various aspects, from drafting contracts to securing settlements and advising about the requisite compliance measures. They can be of help when you face a lawsuit because they can create the right defense strategy for your business.
Invest in liability insurance
No matter how careful you are with your prevention strategy and legal defense, there is always a risk of being implicated. Investing in liability insurance gets your business in a safe space in the event of being sued. It can help you cover the expenses of lawsuits when they occur. There are chances that you may have to pay compensation in events such as premises liability, employee discrimination or defective products. Business liability insurance offers coverage for the settlement amounts so that your company can bear the burden.
Be ethical and honest
Finally, it is vital for businesses to be ethical and honest in their practices and dealings. Not only will it keep you out of legal hassles but also build your reputation as an organization. The objective should be to ensure that every single client and transaction is handled honestly, without bending the rules. Make this mindset a part of your work culture and enforce it for every employee in your organization.
Lawsuits are always an unwelcome burden for businesses, no matter how trivial they may appear. It is best to make all the possible efforts to avoid lawsuits in the first place and address them with the right measures, even if your business is sued. Legal protection should be an ongoing initiative, and collaborating with a business lawyer gets you on the right track.