How Small Business Owners can Protect Themselves from Lawsuits?

Many small businesses are not ready to properly handle unfounded or frivolous lawsuits. It is important to take steps to protect yourself against frivolous lawsuits; it is usually up to the business owner to prove that the claim against them is false. Generally, courts tend to side with customers when it comes to lawsuits, and this can end up costing small businesses so much money that they can’t turn a profit.

Fighting frivolous lawsuits can be a time-consuming and expensive process; this is especially true if you haven’t taken earlier steps to prepare yourself. Studies show that when suits are filed, small business owners bear the brunt of the costs; sometimes these costs get so high that they force the business to shut its doors permanently.

Lots of small business owners get blindsided by lawsuits; they think only large corporations are victims of unfounded lawsuits. In reality, it is small businesses that are paying out-of-pocket for legal fees. Unlike large corporations, they don’t have a team of lawyers on retainer.

The cards are stacked against small business owners, but that doesn’t mean that they can’t protect themselves. Take the following steps to make sure that you stay protected:

Insure Yourself

According to Joseph Tacopina Twitter, small businesses need to buy adequate liability insurance; this type of insurance gives you extra protection against unfounded lawsuits. A good liability policy protects business owners from lawsuits of all types; they even protect against legitimate accidents that are out of your control. Review your policy yearly, so you can verify that it is adequate for your business needs.


Always respond quickly when a potential problem arises; if the front steps of your business are slippery, then it is important that you quickly take steps to warn customers of the condition. If you take prompt steps to remedy problems, then you can use your actions as a bargaining chip when your case is taken to trial.

A serious owner needs to take steps to prevent accidents before they happen; always be aware of your surroundings. If you find something that is dangerous, make sure to fix it as quickly as you can.

Document Everything

When you take care of potential problem areas, make sure to document the steps you take. Documentation shows the courts that you took prompt action to correct the problem; good documentation also shows the courts that you have a consistent pattern of dealing with issues. Documentation really helps your case during a trial.

If you hire outside professionals to help you take care of problem areas, make sure to document the work they do. If you hire professionals, it shows that you took serious steps towards solving your problems.

Small business owners usually want to take care of lawsuits quickly. It might be nice to settle without going to court, but this can cost you a lot of money. People who file frivolous lawsuits want quick cash; they want to settle without going to court.

It’s important to hire an attorney as soon as you find out about a pending lawsuit; a lawyer can look at your documentation, the claims filed against you and the record of the person filing the claim. If something doesn’t seem right, your lawyer can dismantle the case before you ever step foot in a courtroom.

Categories: General, Insurance

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April 18, 2014 How Small Business Owners can Protect Themselves from Lawsuits?