Smart Ways to Reduce Liability Risks for Your Small Business
Running your own small business can be liberating and exhilarating. Making your own way in the world just feels good, and, if you do everything right, the earning potential can be extremely lucrative.
Unfortunately for small business owners, there are others who want a piece of the action, and businessmen and women are frequent targets of lawsuits. Some of these legal proceedings have merit, while others fall into the nuisance category.
No matter what the situation, an ounce of lawsuit prevention is worth far more than a pound of cure. The best way for small business owners to deal with the threat of lawsuits is to take on potential liability risks head on. There are some things small business owners do every day that could be raising the risk of a future lawsuit. Here are six simple things small business owners can do to reduce their legal liabilities and their risk of costly lawsuits.
- Failing to research applicable laws and regulations has tripped up many a business owner. Being blindsided by the law is always a bad thing, and it can put small business owners on the losing side of a lawsuit. No matter what their niche, small business owners should retain competent counsel to become familiar with applicable laws and industry regulations.
- Stick to the tasks they know best. It is easy for business owners to try to do it all. But handling unfamiliar tasks or tackling jobs for which they are not qualified can increase the risk of an error and a resulting lawsuit. Delegating such tasks to individuals with the requisite skills may cost more up-front, but it could save the business a bundle in the long run.
- Being sloppy about contracts can also put small businesses at risk. Once again, using a lawyer to draw up your business’s contracts may come with an up-front cost, but quality legal advice can prevent a potential lawsuit later.
- Hiring the wrong people, or firing incompatible employees, can also put business owners at risk. Personnel decisions are frequent targets for lawsuits, and small businesses may not have the resources to defend these legal actions. That means small business owners need to be extra careful when hiring new workers and even more cautious when letting employees go.
- Not engaging with customers is another dangerous thing. Failing to address customer complaints could make future lawsuits more likely, and it is also bad for business. The owners of small businesses need to stay in contact with their customers to maintain good relations and keep their buyers happy.
- A lack of insurance is another common practice that can make running a small business extremely risky. Many small business owners do not fully understand their insurance needs, and they may not realize the risks they are taking by putting insurance on the back-burner. Anyone thinking about opening a new business should sit down with an insurance agent or attorney to identify and address potential risks.
Running your own small business can be very satisfying and profitable. At the same time, it is important to recognize your risks and be prepared for them. Small businesses will always be targets for legal action. But these are a few things you can do to reduce the liability risks inherent in your field.
The Law Offices of Robert L Hill, APC is here for your small business legal needs. Do you need a contract? Do you not understand an agreement you have already made? Are you struggling with the difference between corporations and LLC’s? If you are in the Carlsbad, California area and are in need of legal advice for your business, contact us today at 760-448-4425.