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You have enough expenses already as a business owner. The last thing you need is the cost of a lawsuit. Unfortunately, U.S. businesses are bracing themselves for billions of dollars worth of lawsuits.
Do you have lawsuit protection on your side?
You can’t cut corners as a business. You must plan for any foreseeable liability, from slips and falls to viruses. Just one lawsuit from the wrong party can wipe out your savings and business dreams.
Learn how to protect your business from lawsuits with these golden rules for business owners.
1. Buy Business Insurance
A business without insurance is a recipe for disaster. What are you going to do when someone slips and falls on your commercial property? Without insurance, you would need to pay for damages out of pocket.
Insurance can’t prevent an employee, patron, or bystander from suing your business. However, if you are liable in a lawsuit, insurance keeps your settlement funds separate from your other assets.
There are several types of business insurance plans to consider. You’ll need workers’ compensation, professional liability, product liability, vehicle liability, and property insurance for lawsuit protection. These plans will protect your business assets in the event of an accident or workplace virus.
2. Incorporate Your Small Business
Remember the importance of keeping your assets separate? One golden rule of lawsuit protection is to incorporate your business.
Incorporation keeps business assets separate from personal assets. If you’re ever sued, settlement funds won’t come from your personal assets. This is critical for settlements that aren’t paid out by insurance.
There are four main types of incorporation models: C and S corporations, limited liability (LLC), and nonprofits. If you’re a freelancer or don’t have any employees, you would incorporate as an LLC.
When you’re incorporated, a party can’t attempt to sue for personal assets at all.
3. Get an HR Department
When you’re a one-personal business, incorporation and insurance is enough for lawsuit protection. However, liability issues grow as your business expands. One of the best ways to mitigate future lawsuits is to hire an HR director.
HR stands for human resources. They’re the liaisons between employees and businesses.
HR professionals are responsible for the following:
- Recruiting, hiring, and terminating employees
- Explaining health benefits
- Managing work conflict
- Handling workers’ compensation
- Oversee harassment training
- Manage hiring diversity
- Payroll management
- Update and uphold policies
- Employee record management
A growing company without an HR department is just asking for employee lawsuits. What are you going to do when an employee sues for wrongful termination? How can you counter the claim without a record of disciplinary actions?
Are you an employee suing a former employer?
If your former employer isn’t an at-will company nor has proof of terminable action, you may have a case. Employees with favorable case outcomes can also apply for a lawsuit loan. These loans help employees pay for rent and other necessities during the lawsuit process.
Discover the Best Lawsuit Protection
Don’t wait until a lawsuit drains your business. Invest in lawsuit protection now to protect your business from future financial disasters.
Lawsuits are just one concern for business owners. Follow the blog to find more ways to protect your assets.