Thursday, May 14, 2015

Is your business safe in today’s “litigation happy” world?

It seems that everyone is suing everyone these days. It’s almost impossible to watch the news or read the newspaper without hearing about the latest lawsuit. Sometimes I actually agree with the person that is filing the claim but most of the lawsuits that I read about seem frivolous and a waste of time in my opinion.

If you have been around long enough then you clearly remember when a lady sued McDonald’s way back in 1994 claiming that their coffee was too hot. She claimed that she had spilled the coffee on herself and suffered serious burns and that her injuries would not have been as severe if the coffee wasn’t as hot as it was. Silly, right? Well, most people thought so until she actually won the case in court. She was awarded $3 million for the incident and just in case you’re wondering, she spilled the coffee on herself while sitting in the car.

Judging by this particular incident I think it’s fair to assume that we can’t always protect ourselves from being sued regardless of what precautions we might take but there are some things we can do to reduce the possibility of finding ourselves on the wrong end of a lawsuit.

Be careful what you say, write and publish
The slightest “misstatement” can land you in a world of hot water. NEVER demean your competition or say anything about them that may be deemed as slanderous, even if it is true. Comparing yourself to competitors will only start an “ad war” even if it doesn’t end up in court and at the very least you may appear to be the one that “started the fight”. This could harm your reputation with potential clients and in the end might even benefit your competitor(s) more tha
n yourself.

Hire an attorney before you begin to do business
As you know, “the devil’s in the details”. That’s never more true than when your clients need to sign legally binding contracts in order to do business with you. One missing item or mistake in your paperwork can cost you plenty. It’s best to have an attorney prepare all of the different legal documents that you will need to use in your business. I suggest that you use an attorney that is experienced in your chosen profession and with your location as well. Being well prepared with the proper contracts is something that will protect you for years to come. You should also have your attorney review your documents from time to time to be sure that they are in accordance with any new changes in the law that may affect your business.

Protect your personal assets
Consider incorporating or forming a trust to protect yourself from possible litigation. As a business owner, it is possible for you to lose your home, your car and any other personal assets you own if your business were to lose a lawsuit. The only way to protect yourself from this possibility is to separate your company's finances from your own. Hiring a competent attorney is the best way to ensure that you are personally protected from any legal proceedings that may affect your business.

Obtain the proper insurance
Most businesses have the proper liability insurance but obtaining errors and omissions coverage is also a wise move. This will protect you in the event that you or an employee make a mistake or fail to do something that you should have done on behalf of a client.

Protect your information
Your business is responsible for maintaining the confidentiality of your clients as well as any vendors or service providers that you may deal with. It is vital that you protect your computers with antivirus programs and any other security related software in order to protect personal information. The same can be said for all of those documents in your file cabinets. Failure to properly protect all of this type of information can find you being sued for negligence in the event it is compromised in some way.
Remember to routinely back up all of your computer files as often as necessary and consider using fireproof safes or file cabinets for all of the hard copy files that you keep in the office. It is your responsibility to take the proper precautions in order to protect the privacy of your clients and you who may need to answer for it if that trust is broken.

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