Steps to Minimize the Risk of a Business Lawsuit

It doesn’t matter if you are a new company or a well-established one: the risk of a business lawsuit is always looming. Companies work with numerous individuals and entities both inside and outside their organizations, including employees, contractors, partners, and suppliers. These and others could initiate legal action which may end up costing your company significantly.

While there is no way to guarantee that your business won’t get sued, there are strategies to reduce the risks. The Houston business attorneys of the Oracle Legal Group take a look.

Give us a call today at 832-291-2798 for a free business consultation.

Step 1: Adopt and Enforce Policies and Procedures.

The use of comprehensive and clear corporate policies can do much to minimize the chances of business litigation. Policies and procedures should cover lawsuit-rich topics like discrimination, harassment, safety, privacy, compensation and benefits, and intellectual property rights.

Having rules in place makes it less likely that someone will violate them and expose the company to a business lawsuit. Combined with procedures to enforce them, these rules allow your business to remove problematic employees and move forward.

Everyone in your business should be subject to the rules, from top-level executives to entry-level workers. There are proper ways to balance the interests of the company with the discipline expectations of employees.

Our Houston business attorneys can help you draft enforceable policies that protect your bottom line.

Step 2: Require Employee Training (and Retraining).

Policies and procedures are only effective if they are properly implemented. This means your workers need to know the rules and the consequences of breaking them. As an example, harassment can take many forms that everyone might not readily understand.

Employees should be aware of what sorts of behavior could constitute harassment. They should also know how to report workers who engage in it. Failure to properly train your workforce could nullify the effectiveness of even the most well-intentioned policies.

Training is for everyone, just as the company’s policies and procedures are. And it has to be ongoing for new hires and repeated periodically. This is especially necessary because new laws can be enacted that affect the accuracy of existing company rules.

Business lawsuit

Step 3: Draft and Execute Business Contracts.

Business contracts can govern your company’s internal and external relationships. Employee contracts can spell out job performance duties and expectations. Independent contractor agreements can be used for freelancers and other non-employee workers. Supplier, distribution, and other third-party contracts are used for your relationships with these outside parties.

We help businesses draft binding, enforceable contracts with key individuals and entities.

Step 4: Purchase the Right Kinds of Insurance.

The insurance needs of every company will vary. If your business has multiple real properties that customers regularly visit, having premises liability insurance is critical. Conversely, a company that only exists online may not need the same types of coverage.

Businesses that have company vehicles need automobile liability insurance, while those with valuable equipment and machinery should protect their investments.

Step 5: Maintain Good Records to Prevent and Respond to Business Lawsuits.

Having a good paper trail can come in handy in the event your business is accused of wrongdoing. For instance, you might need to discipline an employee for violating policies regarding a lack of productivity.

You should give sufficient notice and warning that the employee is falling short of expectations. You might consider meeting with the worker, explaining the problem, and documenting what was discussed. The employee could then be asked to sign paperwork acknowledging that the issue was explained to them.

If the worker is later fired and alleges discriminatory or other wrongful treatment, the paper trail could refute such claims.

The Best Step You Can Take: Hiring Good Legal Counsel.

Retaining a skilled Houston business law firm can assist you with the above and other risk management strategies. The Oracle Legal Group is ready to work for you. If a business lawsuit is filed, we can represent you in court or mediation proceedings. Give us a call today at 832-291-2798.

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Steps to Minimize the Risk of a Business Lawsuit

Steps to Minimize the Risk of a Business Lawsuit