A lawsuit is every businessman’s nightmare. Being sued will not only affect your business operations. It will also affect the image of your business. The process will also cost you thousands of dollars. It could run for months, even years, and it will cause stress and anxiety to those involved. It will save you time, effort, and money if you know the common business lawsuits. Preparation is the key. Knowing what to avoid and what to prepare will save you from all the hassle.
Common Lawsuits Filed Against Businesses
According to the U.S. Chamber Institute for Legal Reform (ILR), the U.S. tort system cost commercial industries a total of $343 billion. Unfortunately, small businesses shouldered 53% of it, amounting to $182 billion. It also noted that small businesses faced higher liabilities than large companies. Whatever nature of business you are in, you are most likely prone to a lawsuit. Here are the most common cases filed against businesses:
1. Premises Liability
You are responsible for anything that happens within the premises of your business. So anything that happens due to neglect will be your liability.
A typical example of such a case is a slip and fall injury. It may sound like a simple lawsuit over an incident of slipping and falling on a wet or slippery surface. Yet, the damage it can do to the injured person can affect the scope of the claim. You will be liable for dangerous conditions such as poor lighting, spilled water on the floor, and cracked tiles.
Another example is an injury due to negligent security. Any form of crime or accident related to poor security will be the owner’s liability. Injuries and damage due to fire code violations also fall under premises liability. Faulty wiring, gas leaks, lack of smoke alarms are examples of negligence.
To avoid such cases, have your premises inspected. Educate your staff on safety measures. Invest in security equipment and training. Keep your area safe and accident-free.
2. Discrimination Claims
Any discrimination on the basis of race, sex, religion, color, disability, national origin, or political belief is against federal laws. You can avoid such claims by practicing respect and fairness within your business. Study different beliefs and religions and apply them to your policies. Follow the equal employment opportunity laws. Conduct anti-discriminatory training for your teams to avoid such incidents.
3. Breach of Contract
As a businessman, you engage in a lot of contracts with suppliers, customers, and employees. These contracts are bound by terms which you should follow. You can be liable if you fail to carry out these terms. An example of a breach of contract is when you fail to deliver your products on time. Or if you fail to meet the standards required. You can avoid this claim if you draft your contracts and make sure your terms are attainable. Review your terms that so you know your deliverables.
Take these common lawsuits in mind so you wouldn’t have to face one. Adjust your policies accordingly to avoid lawsuits in the future. But, what if you are already sued? What should you do?
What to Do When Faced with a Lawsuit
If you already have your first lawsuit, don’t panic. It’s the reality of being in the business. Take this as a learning experience so you can improve your policies and operations. To guide you with your first lawsuit, here’s what you should do:
1. Talk to your lawyer
Having a competent lawyer to consult with is essential as a business owner. Your lawyer will guide you with technical matters such as contracts and policies. Your lawyer will guide you with the legal process and in deciding whether you should defend or settle. He will file counterclaims, draft responses, and represent you in court.
2. Preserve documentary evidence
You should not throw away anything that contains relevant information. Take photos of every incident that happens within your premises. Save footage from your security cameras. Make digital files of your records. These will all be crucial when litigation starts.
3. Respond to complaints and court orders on time
The court sends legal documents such as summons and subpoenas through the service process. An efficient process server should hand it straight to the person. If you receive it firsthand, consult your lawyer right away to draft your response. Usually, you are only given 14-21 days to respond.
These are some things you can do to prepare for any lawsuit. As they say, prevention is better than cure. Better avoid these problems to save you from the headaches of lawsuits.