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Lawsuits & Litigation

Tips to Avoid Legal Issues for Small Businesses

— January 8, 2019

Small businesses often don’t have the budget to defend legal actions. There are steps owners can take to lower the possibility of having legal difficulties.

When compared to larger competitors, small businesses face many unique challenges. The sheer size of these smaller businesses places them at a higher risk for failure. This failure doesn’t have to come from a lack of revenue or sales. In fact, lawsuits and other legal issues are one of the worst areas in which small businesses can have trouble. While large companies can hire an entire legal team to build a defense, smaller companies are often left to defend themselves. For smaller businesses, a good defense is a good offense. In other words, it is important for these companies to be proactive rather than reactive. Here are a few strategies that a small company can use to avoid legal issues.

Write detailed disclaimers to display for customers.

Disclaimers are becoming a favorite defense mechanism for small companies and freelancers alike. These disclaimers are written so that customers can easily comprehend the legal standing of a company with regards to certain services and products. For example, a supplement company may write a disclaimer acknowledging their lack of expertise in the medical field. These disclaimers typically claim that a company cannot be held legally responsible for certain problems that could result from their products or services. While these disclaimers are only applicable to legal standards, they are still a great way for small companies to protect against unfounded lawsuits from customers.

Hire a lawyer to take care of all legal issues.

The legal system is a dense and complicated structure that takes years to understand and even more to master. There is a reason that law school has such a high dropout rate. It takes a dedicated and knowledgeable individual to become well-versed in the legal system. Instead of trying to tackle legal issues alone, small business should invest in a lawyer. Not only will a dedicated lawyer help to save time and money, he or she will also be able to answer any questions that small businesses have regarding legal issues. As there are many different sectors within the legal system, it is important to find a lawyer that specializes in your specific area of business.

Fist bumps during team meeting; image by Rawpixel, via
Fist bumps during team meeting; image by Rawpixel, via

Don’t offer service or advice in risky areas.

Many small companies make the mistake of trying to offer extra services or advice to their clients. When competing with larger businesses, many people feel the need to indulge their customers. This extra effort can lead to companies offering advice or services in areas in which they are not experts. Although this gesture comes from a good place, it often causes more problems in the long run. There are many potential lawsuits that can arise from customers who received services or advice from a small company that had no specialty in the area. Avoiding these mishaps can save a lot of legal troubles in the future.

Install security cameras around the business.

Brick and mortar businesses also have to worry about what happens on their property. In the 21st century, it sometimes feels as though customers will sue for any reason. Installing security cameras is a great way to help protect a small business from legal issues involving events that took place onsite. While there are high-tech options available, simple home security cameras should be sufficient for smaller companies. This ensures that any legal disputes can be quickly solved with video footage offering proof of the events that took place. It is important to install these security cameras to capture events taking place around an entire business. Hiring a small security team is also a great idea to help keep a business safe.

There are countless companies that have been involved in legal issues in recent years. While many people expect a majority of these companies to be large, there are several that are of small size. These small companies are actually at a greater risk than large companies. Without much money for legal defense, there is more damage that can be done. These four tips can help small companies to protect against legal issues.

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