Top 5 Reasons Why Small Businesses Still Get Sued in America Today

You’re excited. You recently came up with a business idea that you knew would generate a good living for you. After hard work, and some critical strategic thinking and planning you rolled out the idea. For some of you there were partners, for a good amount of you there was just you. After your business launched it was in the negative for a bit. Then eventually it becomes profitable.

Once profitable you end up receiving your first lawsuit. Shocked, nervous and emotionally stressed, you have to spend money defending yourself. The great question is could this lawsuit have been prevented? Sadly, it probably could have.

If big enough a lawsuit can tank profits depending on the damages. This shouldn’t prevent you from tackling your dream of being a small business owner. Why? There’s hope if you do your homework right. Yes — there are ways to prevent a lawsuit from happening. Remember that thing about history where if we learn from it we can prevent history from repeating itself? Ah, yes, well that has everything to do with small business as well.

Historically, here’s what small businesses have been sued over:

#1 Breach of Contract:

Keeping contracts can be hard and expensive. Things don’t go as planned and business owners believe in their head that the other party already breached the contract so they decide not to live up to their part and all of a sudden you have a lawsuit. Then after some legal battles the judge doesn’t see it the way you do and now not only do you have to pay up to fulfill your end of the contract but you have to pay legal fees.

Advice: Be loyal to whatever contract you enter into and also hire a good attorney. It will protect your relationships with third parties and will prevent some headaches down the road.

#2 Harassment to Employees or Customers:

HR is not what entrepreneurs want to pay for when they first launch their small business. This mistake is known to be costly. Business owners will hire managers who they then believe to be trustworthy. Eventually the manager does something to an employee that is abuse. Sadly, sexual abuse is growing in these situations. This can end up in court because frustratingly enough that manager was in a position that represented your business. Some of these victims have won up to a hundred million.

Advice: Learn HR, know how to do background checks anytime you hire anyone. Consult with HR professionals if you have too, it can save your business from hiring a disaster.

#3 Premises Liability:

Every small business has a location. It might be your home, or a small retail office downtown, and maybe even a big warehouse. When having a location there’s always a risk. The risk can be with workers only if your business does most work online. If you have a store customers getting injured can become a big risk. No matter what type of business you own this will always be a risk.

Advice: Get some good insurance. It’s worth it. Also spend time training your employees and help protect them from any dangers the job might offer to them. Also train them on how they can protect customers.

#4 Product Liability:

If not’s the premises that will injure someone it’s occasionally the product. You’ll soon learn your products aren’t perfect. Sometimes a little child might get hurt by it. In some occasions when it broke it just really hurt the buyer. There are many possible ways a product can injure a buyer. It will amaze you.

Advice: Do some serious testing on your products in as many different ways as possible. Hire a lawyer to see if you should create warning labels. If big enough make a client agree to terms and conditions. Protect yourself here, it can get ugly.

#5 Asbestos Exposure:

According to Neblett, Beard & Arsenault, one of Louisiana’s biggest mesothelioma law firms, small businesses are still guilty of exposing employees to asbestos in the work place. This is why people still get the vicious deadly cancer known as mesothelioma. One of these lawsuits can end your business overnight. They’re rare because it takes time for the mesothelioma to develop but when it happens it will cost into the millions because it’s someone’s life that will end because your business was responsible for exposing them to asbestos.

Advice: Do your research and make sure none of your products have a trace of any asbestos. Construction and warehouse companies have that higher chance of exposing employees to asbestos.

In Conclusion — Don’t Be Afraid of Being Sued

Continue forward with your dream. The last thing we need is a lawsuit preventing you from chasing a dream.