Facing a business lawsuit can be rather devastating, especially when you are just starting. Luckily, there are proactive steps you can take to lower liability, thus reducing risk. Below, we take an in-depth look at ways to limit liability when starting a business.
Have a good business structure
Your business structure plays a critical role in limiting liability. For example, sole proprietors and small business owners can benefit more from a limited liability corporation (LLC). An LLC protects your personal assets should your business get sued.
Get insurance
Start by getting business insurance that is relevant to your industry. Being insured ensures your business is covered from damages and losses. Be sure to speak with your lawyer to help select the most suitable insurance and coverage for your business.
Identify and mitigate risk
The workplace includes several risks that are almost impossible to eliminate. Therefore, it will help to identify these risks and institute ways to reduce them. Demonstrating to a court that you put measures in place to mitigate these risks is important should your company face a lawsuit. Doing this also helps ensure you safeguard your bottom line and stay competitive.
Don’t forget about sanitation
People falling sick in your workplace is concerning. While some diseases can’t be controlled, many can be prevented with proper sanitation. Start with ensuring perishables are stored effectively and implementing hand washing stations. Having a healthy workforce ensures you stay profitable while limiting liability.
Put warning signs
Have you installed any signs for potential risks in your workplace? Doing this helps reduce liability if visitors or employees get injured within your premises. It will also help to have your staff verbally alert visitors about these potential risks. Having a few signs in place protects your business from expensive lawsuits that could be crippling.
Ensure everything is accurate
Most businesses tend to go over the line when marketing their products or service. However, they risk misinterpreting their business, which opens them up to lawsuits. Even worse, these businesses stand to lose customers and make huge losses. Try to increase sales, but don’t market your product or service inaccurately.
It will help to honor your agreements and ensure everything is accurate. Also, ensure that all your contracts are drafted by lawyer that works within your industry. A solid contract is the first step towards protecting your business from potential lawsuits.
