Guide on How to Protect Your Business from Lawsuits

If you operate a business, you have to prepare yourself from getting sued by customers. It is common in America for consumers to file claims against businesses for products that they are not satisfied. Having this knowledge ensures that your business will run smoothly and keep on thriving.

Example of a General Affidavit

Be Careful in the Company’s Conduct

The first rule is to watch your words and actions. Anything that you or your staff say and do can affect your business image. You must be careful to avoid shoddy business practices and not getting involved in a business with unscrupulous individuals. Businesses should avoid participating in a campaign that involves conflicts of interest.

Preparing Legal Contract for Business

From the start, you should hire an attorney to put a written legal contract in place. The attorney will give you advice on how to act in case you get sued. It is important to select an attorney that is familiar with the local laws. You can also hire an attorney that is expertise in a specific field, for example, if you are afraid you get sued by the IRS, you can hire a tax attorney. You can get recommendations for the attorney from professional organizations like the chamber of commerce.

In most cases, when you get sued, you will be required to submit an affidavit which is an oath you make on the statement you claim and the evidence. Using a general affidavit template is cheaper compared to letting the attorney draft the agreement from scratch. If your case is complicated, it might take the lawyer more time to prepare it. Free general affidavit form provided in the PDF editor like Movavi PDF Editor has the same validation as one drafted by an attorney.

By using the template, you don’t have to wait for the lawyer to craft it. It only takes a few minutes to fill the blank, add your signature and forward it to the lawyer for review. The affidavit form has blue fields which are fillable by typing directly in it. You will have to sign the affidavit in front of a notary in order to validate it.

Don’t Register Your Company as Sole Proprietorship

To protect yourself from lawsuits, you should avoid registering your company as sole proprietorships. If you operate a sole proprietorship company, your individual assets may get attacked in case you get sued by a customer. Instead, you should use a solution to reduce the chances of your assets getting targeted, for example, allowing a trust to own the business. If a business with a trust gets sued, only the funds in the trust will get attacked.

Don’t Sign a Company’s Contract with Your Name

Whenever you sign a company contract, you should avoid using your personal name. Instead, you should sign it with your official job title. If you sign it in your personal name, you will not have the protection of your company and may become personally liable in the event of a lawsuit.

Liability Insurance Coverage

Small businesses should get liability insurance coverage which will pay for damages when customer get injured accidentally on your property. Liability insurance can also protect your company when a customer sues you for misleading advertising. You may also want to consider obtaining error and omissions coverage to protect your business from the customer that make accusations on an error your staff commit.

Prepare an Employee Handbook

You should prepare a comprehensive handbook about how the employees should behave while in the office. It will be easier for the employees to stay in good conduct if they have a handbook where they can reference the workplace rules. You must state this clause in the contract that you let your employee sign.

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Author: Eddy

Eddy is the editorial columnist in Business Fundas, and oversees partner relationships. He posts articles of partners on various topics related to strategy, marketing, supply chain, technology management, social media, e-business, finance, economics and operations management. The articles posted are copyrighted under a Creative Commons unported license 4.0. To contact him, please direct your emails to editor.webposts@gmail.com.