Owning a business is a classic case of high risk, high reward. While it’s not necessarily the equivalent to playing a game of craps in a Las Vegas casino – where the outcome is entirely subject to a roll of the dice – there are certain unknowns that accompany the pursuit.
One of these is the chance of being sued. The United States is a highly litigious society, where individuals are often looking to be rewarded for perceived slights, whether real or frivolous. Plus, with entrepreneurship at an all-time high – not to mention a six-fold increase in attorney spending on television advertisements promoting their services, according to the U.S. Chamber of Commerce – there are plenty of opportunities to take advantage of the court system.
Though no company – small or large – is immune from litigation, there are several steps that you as a business owner can take to reduce the chances of being served, or at the very least, make it unlikely that charges will hold up in court. Here are three of them:
- Cross all your t’s, dot all your i’s
Compliance is an all-important aspect of owning a business. From ensuring that workers are properly trained for tasks that risk their safety, to making employees aware of what sexual harassment is, complying with the rules and regulations of today’s society is a key aspect to owning a business. At its website, the Small Business Administration has a fairly comprehensive collection of resources that can help you understand what t’s need to be crossed and i’s dotted so you can cover all your bases in the event you’re sued. - Support lawsuit reform
There’s no denying that many lawsuits filed are 100% legitimate, where a person – an employee or customer – was truly aggrieved and ought to be compensated for their bad experience or injury. However, there’s also no getting away from the fact that it’s far too easy to sue. The National Federation of Independent Business is lobbying Congress to pass House Resolution 758, better known as the Lawsuit Abuse Reduction Act. Should it be signed into law, it would require litigants to satisfy a greater burden of proof for a case to hold up in court. Consider writing your local congressman to tell them why they should support this measure. - Invest in liability insurance
The court costs alone can be overwhelming should you be the recipient of a lawsuit, requiring tremendous amounts of resources to mount a defense. And that’s not including the reward should the court determine charges are legitimate. With the proper liability insurance protection, though, you won’t have to worry about these expenses.
For several extra tips on how to protect your business from a lawsuit, Investopedia has some additional suggestions. For more information on the various types of liability insurance policies, speak with RC4 Insurance Agency, LLC today.
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