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Starting a business is no simple task. It takes money, planning, time, effort, more money, fine tuning, and gumption. Unfortunately, business owners can let all that they've worked to accomplish be put at risk if they're not ready to withstand, fight, and pay for lawsuits.
Whether it's a contract dispute from a vendor, a customer slip and fall, or a wrongful termination case, being on the receiving end of a lawsuit can be a nightmare. However, if a business is properly insured and ready to manage their public image, even unwinnable lawsuits can be weathered with minimal disruption to revenues and profits.
Insurance Coverage Is Key
When it comes to keeping your money, the best way to make sure a lawsuit doesn't gut the business's finances is to maintain proper insurance for any and all potential liabilities. This means not just having insurance, but having sufficient coverage and affordable deductibles.
Consulting with your attorney to understand your business's potential liabilities, then consulting with a qualified business insurance agent, can help ensure your business is fully covered for whatever legal actions get thrown at it. However, on top of having insurance, a business owner must understand and abide by their insurance policies' terms and conditions.
This will likely require some amount of additional work, such as monitoring employee complaints, or mandatory new hire or annual training. Asking your attorney to review your insurance policies against your business's policies and procedures can help you be certain that your insurance will cover any potential liabilities.
Public Image, Good Will, and Your Reputation
While customers and spurned vendors like to threaten litigation as if one lawsuit is going to impact the entire world's desire to do business with you, the wrong type of publicity caused by a lawsuit can have disastrous results. This is where solid, and decisive, business judgment needs to be exercised.
Even if the costs of litigation can be weathered, if a case is poised to create negative publicity, settling the matter quickly and quietly can often be the correct business move, even if costly at the time. Conversely, sometimes a business must take a lawsuit all the way to the finish line in order to be vindicated in the public's eye. Knowing which path to take often requires consulting with more than just attorneys, but also seasoned business and marketing professionals.