Negosentro.com | Taking Steps To Protect Your Company From Litigation | Running your own business can be one of the most rewarding endeavors you undertake. However, it could also be one of the most challenging things you do. Though you may have problems with employees or supplies, you will also face the potential for a lawsuit. The liabilities your company face are many, and any adverse incidents could legal complaints lodged against you. Litigation takes a financial toll on your company, but it can also destroy your reputation. Here are a few ways to reduce the likelihood of your business being taken to court.
Carefully Structure Your Business
Not every potential liability can be circumvented. However, as you prepare to face your exposures, you need to determine what responsibility you will take as the business owner. It is best to incorporate your business to where your personal assets are kept separate from your business assets. If an employee files a lawsuit against your company for lost wages after experiencing a serious injury at work, the court may issue a settlement that relies on your home or savings account to fulfill. This would leave you bankrupt and probably force your business into closure. Carefully consider your business structure to reduce liabilities.
Purchase Insurance Protection
With insurance protection, your company isn’t precluded from being sued, but it does help with the financial responsibilities of a lawsuit. Litigation has a lot of moving parts. Court reporters Portland Oregon lawyers use to transcribe depositions, expert witnesses, and legal assistants for research are just a few of the individuals that need to be paid for their services. Paying for all of these, as well as filing fees and an attorney, can be difficult. An insurance policy addresses the costs of a legal difference and covers a portion of any settlement amount awarded.
Use Legal Contracts
As a new business owner, you may be tempted to save on the paperwork and rely on the classic “gentleman’s agreement” and seal it with a handshake. It is always better to draft a legal contract, no matter how big or small your business is and regardless of the scope of the transaction. A contract is a binding document that will protect you and the other party if a legal dispute arises. It is a wise investment to have a lawyer on retainer to review contracts that you are asked to sign or to review documents that you have drafted.
Keep Detailed, Organized Records
Technology has made it a lot easier to keep records of all transactions. Whether emails are exchanged or payments are taken, having detailed, organized records makes it easier to address complaints or concerns from clients or vendors. Phone calls need to be documented and kept in a client’s file, as this can avoid miscommunication between the client and other members of the team. Always include the date, time, and the names of anyone that was in the room or on the call when a conversation or transaction took place.
Have Published Company Policies
If you are the sole owner and employee of the company, you may not have to worry about another employee dealing dishonestly with a client or vendor. However, it is still best to have a written explanation of your company’s procedures and policies. This establishes consistency with your actions and helps reduce claims of discrimination. With a set standard for how duties are to be performed or expectations for behaviors and job performance, you have support for your defense if you are ever taken to court. Each policy should focus on moral, honest, and ethical principles. Never bend the rules and never turn a blind to inappropriate and unethical activities.
The way you do business each day is important for presenting your company in the most favorable light. Customer service isn’t a defensive strategy when a complaint is lodged. Treating every customer with integrity and respect will go a long way in reducing retaliatory litigation. Immediately address consumer concerns and work with staff to find solutions to problems. These are the ways you can help prevent a lawsuit.
