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Protect your small business from a lawsuit
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Protect your small business from a lawsuit

On Behalf of | Oct 10, 2022 | Business & Commercial Law

Running a small business in today’s uncertain economic times is challenging. Your priority is keeping your business afloat and profitable and worrying about a lawsuit is likely something you do not have time for.

There are many steps you can take to minimize the chance of a lawsuit and protect your small business.

The benefits of incorporating

When setting up your business, consider incorporating or setting it up as another type of legal entity, instead of a sole proprietorship. Your personal assets and finances are not shielded from liability if you are sued as a sole proprietorship.

Have good liability insurance

Invest in liability insurance. This type of insurance can protect you from various types of lawsuits, including those based on intentional conduct, negligence or an act of nature.

Sometimes things happen that are completely out of your control and make it impossible to fulfill your business obligations. Your liability insurance can cover costs you incur.

Keep quiet and focus on your business

Stay neutral in your positions and opinions and avoid any potential conflict of interest. The best way to do this is to consider how any actions you take within your community could be perceived. Doing things that appear to be for the benefit of you or your business could be seen as a conflict of interest.

Many businesses intentionally do not take a position on any controversial topics or events. Not only does it potentially drive away customers who may not share your views, but it also protects you from any defamation claims if your statements involve specific people.

Good technology is important

Keep up with technology. You do not need to be a technological expert yourself, but you can hire someone to manage and protect your technology. Back up your files and invest in antivirus and security software. A data breach or leak could mean massive consequences for your business.

No matter what you do to protect your small business from a lawsuit, you cannot control everything. Even the most responsible business owners can find themselves facing a lawsuit.

If your small business is sued, an experienced business attorney can provide advice on your specific situation. They can also potentially represent your business interests in court, litigating for the best possible outcome.