You may have owned your business for decades or only for a year or two. Do you know what to do if a lawsuit arises? People in the know say that anyone who operates a small business may expect to face a lawsuit at least once in his or her career, and litigation can be more damaging to a small business than to a large company.
However, if you have a plan in place to confront the unexpected, you will be able to deal with a lawsuit from a position of strength and keep your business up and running. Here are four tips that will help you prepare for the possibility of litigation.
Have proper insurance coverage
Many types of insurance are available for the needs of a small business. For example, you may need to carry a workers' compensation policy. You may also want environmental insurance, directors and officers insurance or employment practices liability insurance. Coverage will be very important to have if you ever have to go to court. The proper insurance could pay for your defense costs, for example.
Know your personal liability
You may have potential personal liability that attaches to a lawsuit. Explore your legal options. You want to be sure that you can take steps to protect your personal property.
Secure important documents
If you are facing a lawsuit, you should immediately gather the documents and electronic information you will need. Be able to identify those who have the documents and know the location of the information. Be sure the information is properly maintained, not deleted, shredded or thrown away.
Rely on professional help
While you may not need to keep professionals such as an attorney or financial consultant on retainer, you should develop relationships with those you trust so that you can call upon them if need be. This simple effort will help you cut down on the stress and uncertainty that accompany contentious situations.