In the U.S., the threat of a lawsuit is real: a NFIB report indicates that small businesses like yours are the main target of many frivolous lawsuits since they are more likely to settle compared to larger corporations. The first step to assessing your chances of being sued is figuring out where you are likely liable or otherwise financially and legally responsible.
Although there is always some risk associated with being a business owner, this should not discourage you. Below are a few simple things you can incorporate to protect yourself and avoid some potential damage.
Incorporating Your Business
Forming an LLC or incorporating will help limit liability to just your business and not your personal assets. When you incorporate your business, you create a separate legal entity under your business name, and any legal responsibilities of the business, including judgments and fines, do not carry over to you. This effectively means that you will not lose personal property in the event your enterprise cannot foot the bill.
Alternate Dispute Resolution (ADR)
ADRs such as arbitration or mediation are a viable means of resolving issues while avoiding going to trial, as long as both parties agree. You can also have your business litigation attorney in Tampa add provisions in your contracts that require disagreements to be settled through arbitration. This will eliminate the need to go to trial.
Good Records
Finally, have good records. In a world of handshakes and verbal contracts, not everybody has the time to enshrine everyday deals in writing; however, well-documented facts on your side will prove your argument or even avoid conflict altogether. Consider getting everything in writing, be it contracts, any types of agreements or invoices.
Remember, having a trusted attorney by your side will be your greatest asset. Lawsuits can occur from anywhere; including someone slipping on your business’ wet front step. Or even a disgruntled employee. Even your own success can expose you to lawsuits, with competitors filing claims to slow you down. Valid or not – lawsuits are not cheap; it helps to protect yourself.
