Businesses are often ill-prepared for lawsuits and not prepared for the costs and implications of getting sued. The US has the highest litigation costs in the world, and this is mainly because of how easy it is to sue. It could take just one lawsuit to ruin your business and your reputation, so you have to take all the steps necessary to protect yourself against them. You should also have a plan in place in case you do get sued. Let’s take a look at how you can avoid lawsuits as a business.

Improve Fleet Management

If you have lots of drivers on the road and your business relies mainly on its fleet, you have to take steps to ensure that not only your drivers are safe, but that their vehicles are as well. Poorly maintained vehicles are more prone to crashes, which can lead to lawsuits. This is why you should consider investing in something like a Geotab asset tracker, so you can tell which vehicles are up for maintenance or should be removed from the road.

Incorporate Your Business

If you’re operating as a sole operator, you will need to consider switching to an LLC or incorporating. While it will not help you avoid lawsuits, it will allow you to avoid being sued personally. There are very few cases where it would make sense for you to stay as a sole proprietor, and virtually no disadvantage to going for an LLC, so if you’re in a field of business where lawsuits are common, it would be a good idea to go for a structure that will offer you more protection.

Work with a Lawyer First

So many people make the mistake of hiring a lawyer only after they’ve started their business. But a lawyer should be one of the first people they meet. 

A business lawyer will not only be able to help you avoid lawsuits but could also help you deal with some of the tax implications of running your business. They can teach you about things like copyright and intellectual property laws, what type of insurance you should get, and employment laws, among others. 

You should also keep a lawyer on retainer if you’re in a lawsuit-prone business. They’ll help you with drafting contracts and can look over the contracts you sign with service providers or clients to warn you of possible holes and prevent you from potential risks, among other things.

Make Honesty and Ethics a Priority

At the end of the day, it will be much harder for people to sue you if you’re truly dedicated to offering the best service and don’t believe in cutting corners. This is why you need to have very rigorous processes and procedures to ensure the safety of your clients at all times. And you need to stick to these processes and policies to the letter, even if breaching them might seem beneficial or a client asks for an exception. 

Lawsuits can never be avoided 100% when you run a business, but there are plenty of things that you can do to keep the probability of getting sued to a minimum. Follow these few tips, and always remember to seek legal counsel before you start your business or make major decisions.