No business is safe from a lawsuit or legal claim. Even sole traders run the risk of being sued by a disgruntled client. In many cases it is possible to avoid legal action for your business, but you’ll need to be prepared. There are lessons you can learn from the big brands that will help you fight legal claims against your business, and you’ll find some of the best advice below.
Get business insurance
Business insurance can act like a parachute, protecting you and your business’ finances from harm. There are different types of business insurance, including those that are meant to protect from physical damage and those that can protect you if someone were to make a claim against your business. Depending on the size of your business, insurance can be expensive and the larger it is, the higher your risk of needing it. Work out what your risk factors are and their likelihood before you choose the most appropriate insurance policies for your business.
Find the right legal support
If you’re a large business, it’s likely that you already have a legal team who can take care of legal claims on behalf of the company. If you’re a smaller business, you’ll need to engage a lawyer with the right expertise to provide legal advice. While you want to trust your employees, there may be the occasional individual who can throw a spanner in the works. An employee could make a claim against you if they feel they’ve been treated unfairly, or you could find yourself needing a lawyer to settle your personal injury case if an accident occurs on your premises.
Put the right safety measures in place
Health and safety policies are vital for businesses. Any failure to adhere to the Department of Health’s guidelines or allowing unsafe working conditions could leave you with multiple claims to fight against, as well as cause damage to your business’ reputation. It’s important that you make your workplace a safe space for employees by offering them training and support to allow them to do their jobs capably and safely. Have a thorough accident reporting policy and make it clear which areas of responsibility are yours, and which ones rest with the employees themselves.
Invest in research and development.
There are two key reasons why research and development is important to help businesses avoid claims, particularly retailers and manufacturers. Firstly, research will help ensure there are no similar products on the market whose creators could decide to make a claim. Copyright suits and ownership disputes are common in business, but you can never be too careful with the internet making it even easier for people to pass off others’ ideas as their own. The second reason relates to testing. The internet is full of stories of people suing companies because of faulty or unsafe products. Testing your products thoroughly and then testing them again before you launch will help make sure your products are safe for use, preventing these claims from occurring in the first place.
Protect against false claims
False claims can be damaging for a business, even if they never amount to anything. Once details of a claim hit the press, the quick judgments consumers make about a company can be hard to turn around – even if the claim turns out to be false. You could have a customer pretend to fall over in a store and sue for damages or have someone make public statements about your business practices – anything which calls your business practices into question could have a negative effect on perceptions of your business and on profits. A savvy press office or PR team can help stop false claims from becoming public or put communications plans into place to limit any damage. You should look into the benefits of PR for your business to see the different ways they can offer damage control in the event of a crisis.
Running a business effectively requires a lot of forward planning and putting controls in place to mitigate potential risks. Having plans in place to defend against claims will relieve your anxiety about running a business and make you a more confident and capable business leader. Some claims are unavoidable, but with the right control measures you can prepare for the worst. Whether you’re a small business owner or a larger business with multiple arms, you should have a suitable defense strategy in place to protect your business and its interests.
