6 Ways To Avoid Lawsuits as a Small Business


If you are new to the world of business, you have a lot to learn. One example of this is in business law. There are so many rules and regulations that you would never give a second thought to unless they are specifically brought to your attention. One of the worst things that can happen to you as a new small business owner is getting slammed with lawsuits because of how expensive they can be, even if you win. Here are six legal tips that you should keep in mind while running your new small business.

1. Get It In Writing

Contracts are one of the best ways to absolve you of legal responsibility. You can use contracts for both customer interactions and business interactions. Always make sure that your contracts are legal and valid by hiring a lawyer. Your lawyer can help you word your contracts exactly how you want them to keep your business as safe as possible from lawsuits. When you are making deals with other businesses, always make sure to get everything in writing. If you do not have an official contract, you run the risk of getting double-crossed at the leisure of the other business.

2. Keep Records

You should always keep multiple records of all of everything you do as a business. These records range from the smallest transactions to the number of customers you get each day to all your phone calls and emails. These can be used both as evidence that benefits you in court or as a deterrent from lawsuits in general. Keep records both electronically and physically. That way, if you lose one of them, you always have a backup. You never know what information you need or when you will need it, so it is always best to be cautious and record everything. Take a page out of the book of a court reporter Hawaii and keep detailed records.

3. Safety Precautions

Negligence lawsuits that result from physical injuries are some of the most common workplace lawsuits. There are certain regulations that you have to adhere to so you can avoid getting fined by organizations like OSHA, but sometimes your attempts at that are not enough, and an unfortunate accident occurs on your property. To avoid this, you should take frequent and thorough looks around your property to make sure that there are as few dangerous areas as possible. If an accident does occur, the only thing you can do is hire a good lawyer and hope for the best.

4. Customer Service

For many people, one of the most frustrating parts of communicating with a business is customer service. Sometimes, if the customer service is actively harmful instead of helpful, the frustrated customer will have the grounds to pursue legal action. Customer service is one of the most important aspects of running a business anyway, but potential lawsuits should be yet another deterrent from providing bad customer service. The general rule is that if a customer is happy, he or she is far less likely to look for opportunities to sue.

5. Sensitivity Training

When you get frustrated, it can be easy to say things you do not mean in the heat of the moment. While this is unavoidable in the worst situations, you can provide training to your employees to reduce the risk of this happening. Some people are always looking for a reason to sue, and suing for discrimination is one of the easiest ways for those people to seek legal action. Treating all of your customers equally is an absolute necessity. Even if your employees are not intentionally being discriminatory, sometimes inherent biases overshadow conscious decisions, and everyone should work to combat that.

6. Get Insured

While having insurance does not provide any protection from potential lawsuits, it does provide monetary protection for almost anything you could think of. It also provides a degree of separation between you as a person and your business as an entity. You likely do not want to take on lawsuits towards your business as a personal responsibility, so it is almost always beneficial to insure your business as a separate entity. General liability insurance is one of the most useful investments you can make when it comes to insurance.


The world of business is a cutthroat arena, and it is hopelessly difficult to succeed in it. Lawsuits will only further impede upon your success, but sometimes, lawsuits are impossible to avoid. Things are always going to go wrong, but these tips listed above are a few ways that you can protect yourself so that people are less likely to pursue legal action against you. The best you can do is to be careful and take care of your customers. Make them feel satisfied no matter what has happened to show that you care about them.