There are many things that can happen to affect how your business operates whether it be financial setbacks or shifts in the market but if there is one a business owner should look out for it is lawsuits. Since you’re the one responsible for running your small business you’re responsible for any problems that occur and unfortunately that includes legal actions that can be taken against your business which is why every business owner must be prepared to deal with them. Below are 4 ways you can protect your business in the event that it might be taken to court.
Be aware of who you associate yourself with
Your businesses reputation can be impacted by a couple of things namely the type of associations you have with others. You want to make sure that your business retains a positive image by remaining close to other businesses or associates with equally commendable traits and distancing themselves away from anything that will draw a negative light on the business. This means business owners must act respectful and classy so that their credibility is not lost.
Liability insurance is a must have for all small businesses. If a customer injures them self in your business you could be facing a very expensive lawsuit taken from your own pockets if you’re not insured which is why it is not only recommended that you get insured but that your insurance policy contains errors and omissions coverage so in the event anyone whether it be a customer or an employee makes an accusation of the owner making an error or failing to stand by a promise backed by a legally binding document that will keep your business secured. It’s always best to review your contracts and have certain terms written in them to protect your business in case something beyond their control happens that would impair them from fulfilling their end of the agreements in the contract. For larger businesses with a board of directors a policy that covers the liability of those members in large lawsuits so they don’t lose their assets.
Find the right legal representative
A business should have a attorney on stand by in cases that requires a legal aid to represent the legal interests of any party that’s involved. A attorney for your business must be someone that you’ve properly screened to be trusted to represent your business and provide legal advice when you’re being sued. Your attorney must be well knowledge on the laws and other customs relative to the area your business resides in and you can optionally choose one with a particular field of study that they specialize in or have vast experience in their profession. There are a couple of places you can go to find the right lawyer for your business like phone book directories or referrals from other professionals or organizations that your business is a part of.
Separating yourself from your business
Separating yourself from your business protects your personal assets from being seized in a lawsuit and the way you can do this is by having a trust take ownership of your business. A trust is it’s own legal entity that can own businesses, cash, property and file taxes on it’s own. In the event your business gets sued and assets are to be seized most of the time it will be the ones owned by your trust and therefore you don’t lose assets like your home just in case you lose your business. The only drawback stems from staying informed on the latest rules,taxes and reports required by the government for large enterprises.
As a business owner you must do everything in your power to protect your business in case of a lawsuit and that means taking some of the steps to decrease the chances of you not losing just your business. There are a lot of things you can do to reduce the damage a lawsuit can do to you too and that includes drafting contracts and seeking consultation from legal experts to frame your business for even more protection. If you’re a business owner there are many other ways you can protect your business from legally but if you get insured, have the right attorney and follow the other tips above your business should be at a good standing if it is ever going to be drawn into a court.