Are you worried about getting sued? Businesses can be fun and enjoyable but are you nervous about the possibility of getting sued? Sadly lawsuits against businesses aren’t rare. Receiving a lawsuit can be stressful, time-consuming, and draining for everyone involved.
It’s important to know how to avoid getting sued and what steps you can take to protect yourself. Read on to discover tips to avoid receiving lawsuits.
1. Avoiding Getting Sued
The first way to avoid getting sued is to incorporate your business. It’s important to incorporate your business from yourself so that if you’re sued they can’t go after your home, bank accounts, and other assets. Then if they sue you they can only go after what’s incorporated under your business.
2. Draft Legal Contracts
It’s important to have legal contracts drafted by an attorney when you’re dealing with another company or person. This contract will protect you in the case of a lawsuit occurring. Make sure to clearly define your services within the contract so the chances of a legal dispute are reduced.
This will protect the parties involved because it’ll show the binding agreement that was signed by all parties.
3. Insurance Protection
Insurance protection doesn’t stop you from getting sued, but it helps you in case you do get sued. This can also help in separating your business and personal finances. Your insurance company can also help you with legal fees and liability costs.
It’s important to take your time researching different liability policies out there so you get the best option for your business. Most businesses go with general liability, which protects them if someone gets injured on the job.
Some companies choose errors and omissions insurance that protects against a lawsuit from a client due to a mistake during a work project.
Were you injured on the job or had a bad accident? Contact the accident doctor today.
4. Write and Implement Company Policies
This is vital to protect your business! Properly having company policies and procedures could prevent lawsuits. Make sure your workers are following your company policies and procedures since this will protect your company.
You can provide an employee handbook or a job manual for your employees to easily view your company policies and procedures.
5. Important Company Policies and Procedures
Some company policies and procedures you want to include are:
Workplace Safety Policies — Even if you’re an office, it’s still important to have safety policies because anyone can still face injuries. By having these policies in effect you could help prevent any damage caused by an employee’s injury.
Disciplinary Policies — When terminating an employee it’s important to have proof the employee was warned about this behavior. If the behavior is against company policy you could show a history of the issues by having write-ups and regular evaluations.
Work Hours — Early on you’ll want to set clear business hours so others know when you’re available for communication and your company. Customers prefer to talk to a live human being. So whether you’re available for after-hours or emergency hours, make sure that’s stated.
Your turnaround time should also be stated from the beginning. You should have it clearly stated how long turnaround time will take to get back to each customer. If a customer or client requests quicker response time, make sure to have any extra fees stated.
Device Use — If an employee does illegal activity under your watch whether you’re aware or not, you could be held responsible. Protect yourself by having a written device usage policy. This tells workers what they can’t and can do on devices that are connected to your network.
Late Payment Policy — You’ll want to have this clearly stated so that customers and clients are aware of any late fees that incur past a grace period. Many businesses allow 30 days from when the invoice was created before the late fees apply.
Also, make sure it’s stated how you’ll invoice your clients and the forms of payment you accept.
Return/Refund — If you’re a retailer or in e-commerce, make sure your return policy is clearly stated on your site or store signage. Make sure what you decide to implement you stick to. Ask yourself too if you’ll stand firmly behind that policy or if you’ll loosen it when a customer complaint becomes escalated.
If you’re a service-oriented business, returns and refunds are still possible. You can offer a satisfaction guarantee for your clients, and that can attract new clients as well! You probably won’t offer a 100% money-back guarantee, but decide how the refund will work and how much.
Decide how you’ll handle customer and client complaints when they’re not happy with your work.
6. Keep Records
This is essential for all reputable businesses, to keep accurate records for business protection. Whenever you sign an agreement, log the date and time it occurred.
Also, what is discussed at meetings is important as well. Any communication whether that’s phone calls, emails, and transactions can be documented. If you only maintain your record-keeping for when a problem occurs.
When you have record-keeping, you can show during a lawsuit what services were agreed on. Consistent records can be used as protection during a lawsuit.
7. Be Ethical
It’s important, to be honest, moral, and ethical every day in your practices to build trust. No matter how much is offered, don’t bend the rules for anyone. It’s not worth the headache of a possible lawsuit. Treat your clients and employees with respect, which helps in preventing getting sued.
8. Provide Great Customer Service
It’s important to have great customer service for your business to avoid a lawsuit. It could be a difference between excellent customer service and a lawsuit! When people feel they’re not being respected and heard that can lead to lawsuits.
Make sure your customer service employees are properly trained to handle upset customers and make sure they have the ability to calm them down.
9. Settle
Sometimes lawsuits come about because of frustrations with how a client feels they were being treated. Remember customer service being important? As a last resort, offer a settlement.
It won’t be fun and will cost money, plus you won’t be too happy about it. But it’s worth it than having to waste more time and money with a lawsuit.
10. Avoid Suing
You feel wronged, and had damages, which sometimes lawsuits are justifiable. Just know that if you sue, you’re opening yourself up to being sued back. If you decide to move forward with suing and get sued back you’ll have to hire your lawyer, contact your insurance company, deal with discovery, etc.
If you don’t sue, then you probably won’t have to deal with any of this or at least it won’t escalate to this!
11. Keep Your Word
If you want to avoid being sued, hold up to your side of the bargain, any agreements abide by them. Breach of contract suits are extremely common in business. If a contract seems hard to agree to don’t agree to it and put yourself at risk.
What happens is you try to hold up to your side of the bargain but don’t, then a customer or client can come after you with a lawsuit for not keeping your word.
12. Hire a Competent Lawyer
When first starting up, it’s important to interview different attorneys until you find the right match for you. You could very well need this person in the future if you’re sued or how to respond in certain situations.
Make sure the attorney you go with is well aware of local laws and customs in the area where the business is located. If you’re anticipating problems from the IRS or state department of taxation, then a tax attorney would be best.
When searching for the right lawyer, you can cold call different attorney offices, receive references from other business owners, or through the local chamber of commerce or other similar sector association.
Next Steps
After reading this guide you should have a thorough understanding of ways to avoid getting sued. Take all these tips and apply them as soon as possible.
Remember to be authentic and reasonable, don’t make promises you can’t keep, and hire an attorney today. It’s important as well to have your written policies and procedures to protect yourself and the safety of your employees. Also, be sure hire a knowledgable attorney you can trust.
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