If you run a business, there’s a very good chance that you will face a lawsuit at some point. And if you wait until you’re actually facing legal action in order to prepare, it could be too late.
Today we’re going to cover practical steps that you can take right now in order to put yourself in the most advantageous situation should a lawsuit arise.
Hire an attorney now… not once you’ve already been sued. An attorney who’s familiar with your business will be able to hit the ground running if you’re sued. In addition, a business attorney can help you structure your operation in a manner that dramatically reduces the chances of facing a suit to begin with. If you don’t have a business attorney on your team, you should seriously consider hiring one as soon as possible.
Perform due diligence in protecting customer information. If you possess sensitive customer information – such as credit card data, personal information, strategic documents, etc – it is important that you take steps to safeguard it. If this information is compromised and you are shown to be negligent in your protection of it, you are likely going to be liable for damages. Take steps to protect this information and document your efforts.
Keep an up-to-date employee handbook. Employee lawsuits are very common, especially when termination is involved. Your employee handbook should outline employment issues related to termination and other potential problem areas, such as sick leave and maternity leave.
Incorporate. If you’re running your business as a sole proprietorship, your personal assets (even including your home and car!) could be at risk in a lawsuit. Speak to a business attorney about organizing your business as a corporation or an LLC. These business structures (and others) can serve to limit your personal liability from business debts and legal disputes.
Protect yourself with liability insurance. In the event that you do lose a lawsuit, liability insurance will often cover your legal fees and settlement costs. Speak to a business attorney who can help you evaluate your risk levels and assess your needs for liability protection.
If you’re in business long enough, sooner or later you’re going to face a lawsuit or other legal action. The steps you take now can determine whether the fallout is crippling to your business, or whether you can survive the storm. Don’t wait until you’re facing a lawsuit to take action. Please get in touch with us today to discuss how we can protect your enterprise.