It's no secret that Americans are a litigious society. We take our rights seriously and most of the time, it works in our favor. Unfortunately, sometimes people get carried away with frivolous lawsuits.
As a business owner, you open yourself up to the possibility of being on the wrong end of a legal liability just by owning a business. While setting up the right type of legal entity can help protect you, it's not enough.
Luckily, there are steps you can take to learn how to protect your business. Keep reading to find out exactly what you should do to protect your business.
How to Protect Your Business
The more knowledge and understanding you have of the various laws, the more you can protect yourself from possible lawsuits. Every single business has specific laws regulating how they can operate their business.
Your first step in small business protection is to learn what those laws are.
Read up on the financial laws that pertain to your business. That includes other businesses, investors, your employees, and how you handle customers.
One of the biggest legal liabilities you'll take on is your employees. Research employment and labor law. It will help make your hiring and firing process easier and drastically lower your legal liabilities.
Intellectual property pertains to those individuals who are the authors of creative materials. This law protects them from others stealing their ideas or creations.
While you might think you're off the hook with understanding marketing and advertising laws, you're wrong. Companies get sued all the time by consumers who claim a company made false advertising promises about their products.
Get It In Writing
If you have a partner in your business, you'll need legal protection. Even if you two are best friends or even family, it's not uncommon for problems to arise in business matters.
Be smart by getting everything in writing first. That way, you can avoid potential problems in the future.
You should also have your employees sign contracts as well. You don't want them to steal your ideas or take your customers away should they decide to start their own competing business.
Then there are your vendors. You need to ensure that your vendors are going to deliver exactly what they promised and when they promised, and at the price, they promised. A well-written contract can make the difference between getting your deliveries on time and a potential lawsuit.
And don't forget about your customers. Many business liabilities have sprung up when a business and its customer made a verbal contract versus a paper one. You don't want to provide a client with thousands of dollars worth of services or merchandise only to have them claim you agreed to a lesser dollar amount.
To save yourself from all legal liabilities, get insurance coverage. This is probably the single best advice for legal protection we can give you besides arming yourself with knowledge.
There are many different types of business insurance. Find out which types of insurance are the best for your specific business needs and fit into your budget.
Basic insurance liability insurance should always be purchased, especially if you have employees, vendors, and/or customers visiting your place of business. This will protect you if anyone accidentally falls or injures themselves in another way.
If you sell merchandise or work with a lot of cash, you may want to purchase insurance to protect you against employee theft.
Read more here to learn about the various different types of small business protection insurance you can buy.
Safeguard Your Business Against Accidents
In 2016, 2.9 million non-fatal accidents occurred at a workplace in the private industry sector. Sadly, most of them were avoidable.
Protect your business by educating yourself on how to ensure your workplace is a safe place to be. Then create a document that highlights where the dangerous areas are and how to maintain them to ensure everyone's safety.
Educate your employees so they are also aware of any dangers at work. Encourage them to report any problems or concerns about workplace safety.
At least once a year or more, train your employees on workplace safety best practices. Have everyone practice what they should do in the event of an emergency.
The more proactive steps you take towards lowering workplace business liabilities, the less likely it is you'll encounter any problems.
Hire an Attorney
If you truly want legal protection, consider hiring an attorney who specializes in this type of law. Liability isn't an area where it's a smart idea to hope for the best.
Instead, hope for the best and prepare for the worst by hiring a lawyer. That way, if you receive a contract you're unsure of, you have a professional who can quickly read and understand the legal jargon.
A good attorney will ensure that each contract you enter into is best for you and your business. Best of all, you won't find out the hard way down the road that you missed the fine print and now are legally liable for something.
And hiring a lawyer who specializes in your type of business will help you actually save money and time. You won't have to spend hours poring over legal jargon and you'll avoid legal liabilities that may have otherwise sprung up in the future.
Make sure that whoever you hire as your attorney is licensed to operate in your state and are in good standing with the American Bar Association.
Continue Your Education
If you want to know how to protect your business, continue your education. Things change quickly, especially in the business world.
Something that was okay even five years ago may no longer be legally acceptable. When you continue learning, you reduce the amount of liability you bring to your business.
We can help. Our employer articles are focused on helping you achieve the success you deserve. To ensure you continue to provide you and your business with the most updated advice you can, keep coming back.