You do need to think about lawsuits and how they could impact your company. A large business will typically survive a lawsuit. They may need to conduct a damage control exercise to negate the impact of bad press on their brand, but the business itself will typically survive. They will be able to afford the costs that a lawsuit will bring for their company. Small businesses, solo ventures and SMEs are another matter entirely. They probably won’t be so lucky, and there are a few reasons why this is the case.
The first issue to consider is the cost. The cost of lawsuits can be remarkably high. For instance, let’s say that you are unlucky enough to have a sexual harassment claim in your business.
The damages that they could receive in a suit like that could be in the high hundred thousands. That’s not taking into account the cost of getting a legal team on board and conducting any repair to the brand that may be needed after the case ends. Don’t forget, these days it’s quite common for lawsuits to be followed on social media and it’s quite possible that your customers keep track of the outcome. So, yes, a lawsuit could impact your potential for future profits.
You may also struggle to recruit new employees to your company. Now, big businesses will be able to offer extra incentives and entice new employees to sign on the dotted line. You may not have the money in your budget to do this.
Of course, we wouldn’t have brought this matter up if we didn’t have a solution. But first, let’s explore some of the different lawsuits that you could face running your company.
Lessons In Lawsuits
There are a few lawsuits that you will be vulnerable too when you’re running a business. We’ve already mentioned one, and that’s harassment. It is, however, important to realize that harassment can come in lots of different forms.
For instance, you might find that an employee is being bullied or feels like they are being discriminated against in your office. It’s also possible that they feel you are responsible for setting up an inhospitable work environment. Don’t forget it’s up to you to keep your employees happy. If you can’t do this, then you are going to face issues, and this could eventually lead to a lawsuit.
That’s just one of the possible lawsuits you can face with employees. You may also find that they file a personal injury claim against your company if they are injured while working for your business on your premises. Damages here can be incredibly high and may be as much as half a million depending on the extent of the injury.
It’s just not employees who can sue your business of course. You can also run into trouble with other companies. For instance, it’s possible that you fail to uphold a contractual agreement. If this occurs, then a business can sue your company to recover their losses. In some cases, this won’t be your fault. For instance, providing a service as a B2B company could be contingent on you having a supply of certain materials. If you can’t access these materials, you won’t be able to fulfil your contract.
Then, there are other more general lawsuits such as copyright. Companies can find themselves on the wrong side of copyright lawsuits if another business or individual feels that you have essentially used materials that they own, often in promotion.
These are just some of the lawsuits that you need to be aware of. Now that you know these let’s look at the best ways to avoid them.
Dodging Lawsuits In Your Company
To dodge lawsuits with employees, it’s simply a matter of making sure that you are looking after their interests and taking the responsibility you hold as a business owner seriously. For instance, you need to make sure that you are keeping health and safety standards in your company as high as possible. One of the best ways to do this is to hire a health and safety officer. They can check your business on a regular basis, look for any issues that could cause an accident and take measures to correct the situation.
You also need to think about using a HR team. An HR job recruitment agency will be able to help you find the right individuals for your HR support. Even small businesses should consider making hires like this. Without a HR team, it can be very difficult to stay on top of your employees and make sure that there are no issues bothering them like bullying that could one day lead to a lawsuit.
On top of this, you want to make sure that you have a legal advisor in your business. With a legal advisor, you can have an expert on your side who can help you and make sure you are not leaving yourself open legally. A legal advisor can be an expensive hire. But you can avoid the high costs by using an outsourcing service. That way, you’ll be able to get the full service you need without incurring a massive cost.
Will A Lawsuit Kill Your Company?
It very possibly could, and that’s why you need to take all the measures that we have mentioned to avoid a lawsuit. You can also look into insuring your company. With business insurance, you can provide a safety cash cushion for your business. The basic idea here is that you won’t have to worry about the cost of a lawsuit because you can claim on your insurance. While the monthly cost of this type of coverage may be expensive, it will be well worth it if a lawsuit does ever crop up.
One of the biggest mistakes in business is thinking that a small company won’t be at risk of a lawsuit. Even a one person businesses can be sued by somebody, and if they win, it could be a hard knock on your company.