It’s every business owner’s worst nightmare but legal action against companies is surprisingly common for anything from negligence at work claims to product faults or failures. No matter how well you feel your company is prepared or protected from lawsuits, claims can affect even the biggest and most revered firms. One need only look at Samsung with its mass recall of the Galaxy Note 7 through fire risks caused by faulty batteries as an example.
Nonetheless, while you can’t 100% protect your company from all possible eventualities, there are still some sensible precautions you can take to mitigate the risks of punitive legal action. Read on for some tips to hopefully avoid potentially costly or damaging claims.
Choose Your Words & Actions Wisely
As a business owner, it’s your responsibility to act in the best interests of the company – including everything you say and do on behalf of the firm (note, this also extends to your employees). In almost all cases, you should avoid making possibly slanderous or libelous public statements and instead seek proper guidance from a PR firm if you want to talk for the company.
Moreover, you should also place considerable importance on the companies and individuals you work with to avoid potentially being linked – directly or indirectly – with operations more unscrupulous than your own. You should also try to avoid possible conflicts of interest (e.g. sitting on a local licensing board while also owning a bar).
Invest In Adequate, Business-Specific Insurance
No matter how careful you are, accidents and mistakes can and do happen. Insurance may seem like an unnecessary expense but you will rue the day you decided not to insure your business in the event of a problem arising. Moreover, policies vary from industry to industry and business to business – meaning cover may be considerably cheaper than you imagine. For the best advice, check online for Flexible Trade Insurance Policies tailored specifically to your range of operations.
Always Have An Attorney On-Side
There’s no telling the number of situations that might arise where you could unexpectedly need legal advice or representation so having a trusted attorney on-call should be a pre-requisite. Having a close relationship with a business lawyer can pay significant dividends in the event of unforeseen issues – particularly if they also have specialist knowledge of your sector. Doing a quick search online should help you find reputable local business law specialists.
Separate Personal & Private Interests
If you run your company as a sole trader or proprietor, you are personally liable for any problems it might encounter – including legal action, penalties or tax problems. Consequently, the personal assets of a sole proprietor (e.g. home, car or other valuable goods) can be used as a settlement in the event of a claim. A better option is to incorporate your company or set up a trust as a legal entity behind your company.
Don’t Take Chances With Cybersecurity
As the internet and technology have come to play an increasingly dominant role in business, so companies have been left wide open to the multiple threats of cybercrime. It’s estimated cybercrime could cost companies as much $10.5 trillion by 2025. As soon as 2021 the damage inflicted by cybercriminals is expected to total $6 trillion – making it the third-largest economy behind the US and China.
Contrary to what you may think, online crime doesn’t just affect larger companies. Rather, most crime occurs in the Small to Medium-sized (SME) sector. Avoid taking unnecessary chances by enlisting the services of a qualified online security provider.
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