{"id":196954,"date":"2020-03-11T10:17:51","date_gmt":"2020-03-11T17:17:51","guid":{"rendered":"https:\/\/www.nationalfunding.com\/blog\/?p=196954"},"modified":"2020-07-06T15:27:23","modified_gmt":"2020-07-06T22:27:23","slug":"reasons-businesses-get-sued","status":"publish","type":"post","link":"https:\/\/www.nationalfunding.com\/blog\/reasons-businesses-get-sued\/","title":{"rendered":"5 Reasons Small Businesses Get Sued and How to Avoid Them"},"content":{"rendered":"

Small business owners constantly have their hands full and, between promoting products or services, managing employees, administrative tasks, and overseeing cash flow, it\u2019s likely you\u2019re not thinking about getting sued.<\/p>\n

However, lawsuits against small businesses are more common than you might think. According to the Small Business Administration<\/a><\/u>, up to 53% of small businesses are involved in at least one lawsuit at any given time and the threat of litigation impacts small businesses across virtually every industry.<\/p>\n

If your business is sued, it not only impacts your bottom line, but it also damages your reputation and your emotional health. If you want to avoid litigation, it\u2019s important to first understand some of the most common reasons small businesses get sued in the first place.<\/p>\n

Why Do Small Businesses Get Sued?<\/h2>\n

Issues Regarding Intellectual Property<\/h3>\n

If you use an image owned by another person or copy a logo of another business, even accidentally, you may face a lawsuit associated with copyright infringement.<\/p>\n

Discrimination<\/h3>\n

During the hiring process, it\u2019s never acceptable, or legal, to ask questions regarding a candidate\u2019s race, religion, sexual orientation, or gender. If you\u2019re not sure whether an interview question is legal, check with the U.S Equal Employment Opportunity Commission.<\/a><\/u><\/p>\n

Harassment<\/h3>\n

There\u2019s a reason companies establish comprehensive HR guidelines and best practices, they ensure that all employees understand what is expected of them, and the consequence they face if they behave inappropriately. Any allegation of harassment should be taken seriously and addressed immediately in order to avoid litigation.<\/p>\n

Wage Disputes<\/h3>\n

As a business owner, it\u2019s important that you understand how labor laws can impact your business. In general, you should never try to reduce an employee\u2019s overtime pay because, according to the U.S Department of Labor<\/a><\/u>, overtime pay must be at least one and a half times an employee\u2019s hourly rate if they exceed 40 hours of work within a week.<\/p>\n

Property Accidents and Injuries<\/h3>\n

Any time you or your employees interact with a client, there\u2019s the risk that something could go wrong. For example, slip-and-fall accidents account for over one million emergency room visits<\/a><\/u> every year, and if a client injures themselves on your property you\u2019ll wind up paying hefty legal and medical fees. Additionally, if you\u2019re on a client\u2019s premises and you damage their property, you could find yourself in legal hot water as well.<\/p>\n

How Can Small Businesses Avoid Getting Sued?<\/h2>\n

Hire a Reputable Lawyer<\/h3>\n

Having a professional who knows and understands the legalities of running a business can help you avoid lawsuits. A reputable lawyer will be able to inform you of risks that can lead to litigation for your small business and advise you on the next steps you should take if your business does face a lawsuit.<\/p>\n

Follow HR Best Practices<\/h3>\n

Avoid getting sued by your employees by making their health and wellbeing a priority. The first step is to create a comprehensive employee handbook that clearly states all office rules; make it clear your business does not tolerate harassment or inappropriate behavior. In order to create a safe work environment, your employees need to understand what the office expectations are and what to do in case an untoward incident occurs.<\/p>\n

Avoid Making Promises That You Cannot Deliver<\/h3>\n

Never make false promises to your clients because failure to deliver on a product or service will not only lead to unhappy clients it could also lead to lawsuits. Save yourself time and money by being transparent with your customers.<\/p>\n

Have a Comprehensive Insurance Portfolio<\/h3>\n

Running a company is risky business. Having insurance is one of the only ways to truly protect your business assets in the event of a lawsuit. Regardless of your industry, here are some basic policies<\/a> you should consider:<\/p>\n