How to Minimize the Risk of a Business Lawsuit

Business Lawsuit

Business owners face litigation risks from both inside and outside their organizations. Employees, contractors, business partners, suppliers, and others could initiate legal action. There is no way to guarantee that your business won’t get sued. However, there are strategies you can adopt to reduce the chances of a business lawsuit. The New York business lawyers of Rosenbaum & Taylor take a look.

Adopt Strong Policies and Procedures

Corporate policies, when they are well-drafted and comprehensive, can go a long way in minimizing the risks of a business lawsuit. Your business should adopt clear, concise policies and procedures that are communicated to all of your employees.

They should address such diverse topics as discrimination, harassment, safety, privacy, compensation and benefits, intellectual property, and more. Having these rules also shows that your business takes these issues seriously and won’t permit violations from employees or management.

Everyone in your company should be subject to the rules, from top-level executives to entry-level workers. Violations should be handled according to the procedures outlined in your corporate policy. We can help you draft policies that protect your best interests.

Train Your Employees to Understand the Rules

Policies and procedures are only useful if they are put into practice. But this won’t happen if your workers don’t understand them. Harassment, for instance, can take many forms. Employees need to know what constitutes harassment and how to report workers who engage in it. Failure to train employees can nullify the effectiveness of even the best company policies.

Training is for everyone, just like the company rules are. And it has to be ongoing. New laws can affect the content of your business policies, so re-training should be a regular occurrence.

Use Intelligently Drafted Business Contracts

A New York business lawyer can assist with drafting contracts to govern all aspects of your business. You may want employee contracts to spell out job performance duties, expectations, and your company’s rights. Independent contractor agreements can cover freelancers and other non-employee workers. Meanwhile, supplier, distribution, and other third-party contracts handle your relationships with these outside parties.

Contracts bind all of these individuals and entities to certain performance requirements. When these parties don’t meet contractual requirements, you will have justifiable grounds for taking certain actions. The absence of such contracts can make company decisions seem arbitrary and expose your business to litigation risks.

New York Business Lawyer

Keep Good Records

Policies and procedures, training, and contracts are most effective with strong recordkeeping and retention practices. Let’s say you need to discipline an employee for violating company policies regarding a lack of productivity. You will want to give sufficient notice and warning that the employee is falling short. Maybe you meet with the worker, explain the issue, and then document what was discussed in the meeting.

You will also want to demonstrate that the employee was made aware of the rule he or she is breaking. Being able to document everything from communicating the underlying policy to the disciplinary measures taken is important. You need to demonstrate that your actions are justified, fair, and based on objective criteria.

A good paper trail can protect a business against even the most serious allegations. Record retention, and knowing where to locate certain documents, are also key. A New York business lawyer can help you implement these and related practices.

Carry the Right Kinds and Amounts of Insurance

The insurance needs of every business will vary. If your company has multiple properties that customers regularly visit, having sufficient premises liability insurance is critical. Meanwhile, a company that only exists online may not need as much coverage. Does your business use company vehicles? If so, automobile liability insurance is necessary. What about insurance to protect valuable equipment and machinery? Some but not all businesses will need it.

An experienced New York business lawyer can review the unique insurance needs of your company. Then, we can advise in general terms what the insurance is for and recommend amounts of coverage. Finally, we can direct you to insurance companies that can help cover you.

Legal Counsel Reduces the Risk of a Business Lawsuit

Hiring the right New York business law firm can help with the above and other strategies to reduce litigation risks. That’s where our firm comes in. In the event a business lawsuit is filed, we can also defend you in court.

Learn more about protecting your legal interests by calling Rosenbaum & Taylor at (914) 326-2660 today.

Further Reading...

Get a Free Consultation