Running a business in a litigious society means you’re always wary of being sued. Although most companies have insurance against potential compensation claims, this doesn’t mean that a lawsuit won’t have a negative effect on your business.
In fact, you’ll find that your insurance policies are unlikely to cover every scenario, which means your business is still vulnerable to particular claims. In addition to this, your policy may have high deductibles, which can be difficult to fund. Furthermore, the negative publicity surrounding a claim against your company may cost you customers and income, which could be disastrous for your firm.
With some easy and innovative solutions, however, you can minimize the risk of your business being sued. If you want to avoid the stress of a lawsuit, take a look at these ways you can reduce the risk of someone making a claim against you…
Use written contracts
Although verbal contracts can be effective, they are harder to enforce. With a written contract, you’ll have a clear record of what’s been agreed upon. A properly drafted contract will have various contingencies in place too, which could help to resolve any disputes further down the line.
Implement health and safety procedures
Poor health and safety is a sure-fire way to get your business sued. If an employee sustains an injury because of an unsafe workplace or a customer gets hurt due to your negligence, you could face a claim for millions of dollars. Your business may even face additional action for breaching health and safety regulations. By implementing effective health and safety procedures, you can reduce the risk of accidents and injuries and protect your business from potential lawsuits too.
Use CCTV, video surveillance and dash cams
A video recording can be a fantastic piece of evidence and may be enough to prevent a claim from being filed against you. If your business uses vehicles to deliver to customers or to transport goods, for example, ensure every truck, car or motorbike is fitted with a dash cam. Similarly, add CCTV inside and outside of your business premises.
Sadly, it’s not uncommon for people to make false allegations in a bid to secure a compensation payout. If someone makes a claim against you or an incident occurs, you’ll have video evidence to prove exactly what happened and confirm who’s at fault.
Incorporate your business
Sole traders don’t have to incorporate their business, but this can put them at a disadvantage if a claim is based. Unless your business is incorporated, your personal finances and assets can be used to pay compensation when a claim is made against your business. When you incorporate your business, however, it separates your personal finances from the business and ensures that they’re protected.
Stop your business facing a lawsuit
Whether you’re just starting out or you’re running an established business, it’s important to access up-to-date legal advice. The law regarding workplaces can change regularly, so you’ll need to ensure you’re adhering to the relevant regulations. With preventative legal advice, you can reduce the risk of someone making a claim against your firm and protect your business in the long-term. Collaboration.