Best Practices To Prevent Your Business From Getting Sued

Unfortunately, we live in a litigious society. What that says about society is for someone else to decide. But the fact of the matter is that any business can be sued at any time by an employee, customer, vendor, or just about anyone that it comes into contact with over the course of the day. The number of fact patterns that lead to lawsuits is endless, and the sad reality is there is nothing you can do to guarantee that you will never be sued. To add insult to injury, defending a lawsuit can be expensive, time consuming, and emotionally draining.

Are you ready for some good news? Many lawsuits can be prevented altogether, and those that can’t be prevented may be neutered by employing some simple best practices.

Do a good job and be professional. You are a business owner so you have specialized skills and experience. When you make a commitment to a client or customer, honor that commitment and make customer satisfaction a priority. The reality is that most people recognize that mistakes happen. When things go wrong for whatever reason, people are less likely to get adversarial if they have enjoyed working with, or doing business with, you.

Communicate. It should come as no surprise that many lawsuits arise from a simple misunderstanding. One of the best preventive measures to avoid litigation can be a non-accusatory discussion in which any disagreement or misunderstanding is explored. A simple telephone call or honest discussion can save much time and money. Note – such discussions must end immediately if a lawsuit is imminent or has been filed. At that point, discussions should be conducted by counsel.

Document everything. The best way to avoid a misunderstanding in the first instance is to document all applicable policies and terms. A well-drafted contract, employment manual, or other writing that records critical terms of an agreement or event can prevent a misunderstanding from devolving into a lawsuit. The cost of engaging an attorney to review documents such as contracts and purchase orders is nominal when compared to the expense associated with defending a single claim. Have an attorney write you a solid contract that properly limits your liability and exposure. Also, review and understand all contract terms before you sign. If you don’t understand something, ask for clarification. Similarly, when possible, discuss the decision and process of terminating an employee before doing so. You will be better prepared and can prevent pitfalls that you may not have considered.

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