Many compare starting a business to having a new baby. Many responsibilities come with starting a business, and many unexpected events could occur in the first couple of years. Thus, business owners, like new parents, take the time to protect their rights and interests in a new business. Yet, no matter how careful you are or what protective measures you take, the unexpected can still occur. No one expects to be involved in a business litigation situation. However, it is a matter that small business owners can prepare themselves for.
No one said opening and operating a small business is easy. Many families and individuals in New York take on this adventure each and every year. When business disputes occur, this can be very damaging for a small business owner. Even a dispute that might appear to be minor could have significant financial consequences. It is important to understand what necessary precautions can be taken now and what courses of action could help you resolve these business law issues.
First, it is imperative to be aware of your insurance options. If a lawsuit were to occur against you, this could help protect both you and your business. Whether it is Employment Practices Liability Insurance, Directors and Officers Insurance, Workers' Compensation Policies, Environmental Insurance and even Commercial General Liability policies, it is important to know how these policies could benefit you.
Next, business owners should note their potential personal liability in the event of business litigation. In some situations, your personal income and savings could be put at risk. It is essential to understand how you could take steps to manage or even avoid these risks.
Finally, when a small business is sued, it is important to implement a litigation hold. This allows the business to identify all people, property, locations and documents that are pertinent to the matter. Although this is a tedious and onerous task, doing so could help you assert a third-party action or even develop a strong defense against the claim.
No matter the cause or reason for business litigation, small business owners should approach them in a serious and timely matter. Failing to do so could put a business at risk or, worse, your personal life. Those dealing with this or any other business law matter should take the time to understand their rights and legal options.
Source: Smallbizdaily.com, "Preparing for Litigation Risks as a Small Business Owner," August 21, 2017