Liability claims can be costly and lead to a substantial financial loss for your business. You must take preventive measures to ensure that your business has the least liability exposure, thus reducing the chances of liability-related losses. This blog will discuss the six mistakes that small business owners make that put their businesses at a higher risk of facing liability charges.
Stop Making the Following 6 Mistakes and Secure Your Business from Increased Liability Exposure
- Taking On Too Many Jobs
As a small business owner, you should do all the jobs yourself as a cost-cutting measure, as hiring professionals can cost you money. While you may be qualified and have the expertise to head your business as its CEO, a business involves several specialized jobs, such as an accountant, human resource manager, and legal counsel. You may need to gain the requisite knowledge and skills to perform the varied job responsibilities and make decisions that may make your business more vulnerable to liability claims.
- Unaware About Important Regulations
Starting a business involves adhering to regulations specific to your business and businesses in general. You may, in your ignorance, follow a business practice that, instead of being compliant with the regulation, may be a violation of the same.
For example, the Department of Labor’s Fair Labor Standards Act lays down guidelines related to wage and hour issues for your workers. You may be liable to penalties and fines if one of your workers raises the issue of non-compliance with the act.
- Failure to Draft Proper Contracts
When you agree to do a job, in most cases, you sign a contract with your client. A contract is a legal agreement between the concerned parties that specifies the type and scope of the job each party is expected to perform. If you have yet to draft a formal contract by an expert and instead opt for a generalized document, you may put your business at a high risk of liability charges.
- Neglecting to Address Client Complaints
Following a complaint by your client, if you show the urgency to address the problem and offer a viable solution, you may prevent the escalation of the situation into an expensive lawsuit. However, a lack of proper response from your end or unsatisfactory customer redressal services may significantly expose your business to liability claims.
- Ignorant About Hiring and Dismissal Laws
If, in your ignorance of the state hiring and dismissal laws, you make certain employee-specific decisions that violate the existing regulations. You may make yourself vulnerable to costly penalties and lawsuits.
- Not Having Insurance
The right liability insurance can cover your business from many covered perils. Not having insurance means you have to pay the liability claim settlements, if proven, from your resources which may lead to extensive financial losses.
Cover Your Business Liability with J. Archer Insurance!
Contact our team today for more information on our different types of commercial insurance coverage. At J. Archer Insurance Group, we help you secure your business with the best insurance coverage at the most affordable rates.