It’s the worst fear of every business owner – being sued. And given that we live in a “sue-happy” America, it’s not an un-based fear. Being sued is the newest “get-rich-quick” scheme, and it is businesses that pay the price. Of course, sometimes the businesses actually are at fault, and the claim isn’t unreasonable. However, here are some tips for businesses on how to avoid being the target of a lawsuit.
- Document, document, document
It’s very important for businesses to keep everything in writing – from contracts to employment agreements to memorandums of understanding. That way, if there is a dispute, there are accurate records of what was promised.
When I was in school, some professors wouldn’t distribute their Powerpoint slides because they claimed it was their “intellectual property” and they didn’t want to just hand it out. It’s important not to violate intellectual property laws when it comes to logos, trademarks, and using copyrighted material. Intellectual property laws also include using intangible creations like art and music. If using materials like these, it’s important to make sure to have the correct permissions.
- Employee Handbook
Getting a technical writer to draft up an employee handbook can save companies from employees who might like to sue. If every employee is given the handbook, the understanding is that the employees have knowledge of rules and regulations, and consequences for not adhering to the handbook. It’s important to update the handbook on a regular basis as well – especially with technology boom, companies have to draft policies to deal with new issues (for example, should employees be able to smoke electronic cigarettes in the office?)
- Routine maintenance
If the business has a property, keeping all public areas well maintained and as safe as possible can go a long way to preventing a lawsuit. This includes areas like walkways, bathrooms, stairs, and elevators. Even with these precautions, however, accidents can still happen, so it’s important for businesses to have proper liability insurance (http://www.generalliabilityinsurance.org for more information on insurance).
- Death and Taxes
The only two sure things in life, right? Well, if a business wants to not “die”, it needs to make sure it’s on top of paying taxes. Taxes are complicated, messy things, so having a tax attorney on staff (if the business is large enough) or hiring one temporarily at tax time can save hassle and lawsuits.
- Don’t tick off the locals…
And make sure to abide by all ordinance and coding requirements. Not being compliant can lead to tickets, fines, and even being shut down. This applies to the physical building, as well as any equipment or tools that clients or employees have access to.
This is along the same lines as ordinances and codes, but for things like liquor licenses and any sort of professional licenses. It’s also important to make sure employees have correct licenses, especially in areas where their job description includes serving alcohol (it is common practice to have to take a class to obtain the permit).
Lawsuits can be a lot of trouble for everyone involved, and in many instances, communicating with the person who wants to sue the business can go a long way. Clearing up misunderstandings can often keep businesses out of court. However, this won’t always work, but it’s not a bad idea to try.