Take action and stop your company getting sued. 43% of businesses are threatened with a lawsuit every year. Such lawsuits have the capability to cripple small businesses – not only can they be expensive to pay off, but they can cause lasting damage to a company’s reputation if the lawsuit goes public.
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This is why it’s important that every business takes steps to protect themselves from being sued. While insurance can help to pay off lawsuits, there are other steps that you can take to prevent lawsuits occuring in the first place. Below are five examples of steps you can take to prevent your business being sued.
Don’t make promises you can’t keep
Many lawsuits made against businesses are due to broken promises. This includes agreed deadlines not being met, certain tasks being ignored or surprise fees/underpayments. When taking on a new client or an employee, be realistic about what you can provide and don’t try to deceive them. If there’s no certainty that you can achieve something, make this clear from the beginning. Transparency is essential for winning over customers and keeping them happy.
Put everything in writing
Some clients/employees may try to claim that you agreed to certain terms, which in fact you did not agree to at all. Having written evidence of your agreement in the form of a contract can protect you from a potential lawsuit. Sometimes a simple email confirmation or text is all that is necessary. This is why many professionals will summarise meetings of phone conversations with a follow-up email.
Keep your brand original
It’s also possible to get sued by other companies for stealing elements of their brand. Things like brand names, logos and slogans can be trademarked – which means that only that company has legal rights to that brand name/logo/slogan. To ensure that your brand is original, spend time doing your market research. Check that no other rival established companies are using your brand name or a similar logo. This guide at Forbes explains more about trademark infringement.
Work with legal experts
Legal services like Beyond Law can be worth paying for to help protect your business. This doesn’t just include defending your company in court – legal experts can also help you to write up contracts and apply for trademarks or patents. They may even be able to help you diffuse conflicts with employees or customers by letting you know how to handle the situation (should you call them? Is it better to send an email?). This can help to prevent a lawsuit from occurring.
Protect customer property and data
You can also stop your company being sued for losing/damaging the property of others. For example, if you own a painting and decorating company, you could get sued for spilling paint on a carpet. Take steps to protect the property of others. It’s also important to secure sensitive customer data (such as payment details and passwords) from hackers. This could include making sure that all data is stored on a secure cloud server. This article at Segment offers more tips on how to keep customer data secure.