As a business owner, it’s essential to do everything you can to safeguard your investment and livelihood. While you must complete daily operations and manage your team, it’s also your responsibility to limit risk every day. In this litigious society, businesses can never be too careful when preventing lawsuits. Although no one can control every eventuality, there are five small business protection tips you can note today to protect your company from being sued tomorrow.
Protect Your Small Business From Getting Sued
Watch what you say and do
The image of your brand is important. Not only can it attract or repel certain markets, but it also affects how your team operates. Owners and their employees should avoid making public announcements or conducting any business that might be considered questionable. In this age of screenshots, it’s essential that you think before you type and press send. This includes not making any libelous or potentially slanderous statement, as well as not doing business with unscrupulous individuals. Additionally, be aware of any conflicts of interest. Situations such as these can damage your integrity as a business owner and can land you in legal trouble.
Separate yourself from the books
Although many business owners start their companies out as their own side job, it’s essential that you separate yourself from the business’s books when possible. This can be problematic if the company is sued because the owner’s individual assets (such as home or car) are easy to attack or attach in a court of law.
A good way to limit this possibility is to have a trust own the business. A trust is a legal entity that, in most cases, files its own tax return and can own property, businesses, cash, securities, and other assets. If properly established, a trust will own a business and if it is sued, the business is better protected.
Safeguard your files
Most businesses operate on computers and online, which requires being security savvy. Hackers have a way of gaining access to files, even those of small businesses, that can be incredibly damaging to a brand. If information falls into the wrong person’s hands, you could be held liable for the damages and face being sued by clients, vendors, and employees. Also, if a virus were to bring down a computer system, it could cause your company to be unable to perform certain contracted work. To prevent these digital nightmares, be sure to back up files and data regularly, install and maintain antivirus software, and have cyber security practices in place.
All business owners should obtain liability insurance in case, for example, a customer slips and falls in your place of business. If he or she is injured or their property gets damaged while on your premises, they could sue your business.
Certain professionals who give out advice and consultations will need to consider errors and omissions insurance to ensure their business is protected if a customer or client accuses the owner of making an error or not fulfilling a contract.
The right insurance policies can step in to help if your business is sued, regardless of whether you were at fault or not. With this peace of mind, you can work to prevent accidents from occurring, while knowing you have protection in place if the worst does happen.
There are many ways to protect your business from being sued, and these were just a few of them. The right business insurance policy should address your risks while staying in line with your budget. At J. Archer Insurance Group, our experts help you find the best coverage for your needs. Serving Houston, Texas and beyond, contact us today.