Lawsuits -- How to Avoid Them!

Another entrepreneur article this time, about a very serious issue for small business owners involving lawsuits. Costly lawsuits can often cripple a business in its startup phase, and figuring out both how to avoid piling up costs in damages as well as what lawsuits are actually realistic and which are just out for settlement money is very vital for a business. One small example from the article shows an example of this:

"In Northridge, California, a woman decided to purchase a new blender from an appliance store and selected one at the bottom of a pile of five boxes rather than ask for help reaching the top blender. When the other four blenders fell on her, she sued the store for not warning customers about the danger and for stacking the boxes too high, claiming she now had carpal tunnel syndrome along with neck, shoulder and back pain."

Another example shows the example of a woman who ran a startup motel which sustained damages that kept her from recouping much of her original startup costs for years and years because of frivilous lawsuits looking for a simple settlement.

The local bar scene can be an awfully rough place for such things. Broken glass, slippery floors, and alcohol do not mix together very well. The threat of lawsuits can pop up on any given night. Not only is the threat of lawsuits from patrons a dangerous one, but the threat of lawsuits from employees who have to deal with the drunken people as well!

The article lists a good group of points to help avoid such lawsuits:

• Make sure you’re adequately covered with the right type of and amount of insurance.
• Post any necessary warnings about safety issues.
• Stay on top of all necessary business codes and regulations is one preventative step
• Attorneys and group fighting such frivolous lawsuits suggest voting for politicians who advocate tort reform.
• If you are sued, don’t panic or make any hasty decisions, since plaintiffs and their attorneys are often seeking a quick buck and may simply move on to someone else if you don’t respond immediately.
• Research the law firm suing you to find out if they have a history of similar frivolous lawsuits. If you find similar lawsuits on the books, contact the office of the attorney general in your state
• Create, print and distribute an employee manual that includes all company rules, guidelines and regulations for your employees. Make sure you include sections on what constitutes grounds for dismissal as well as what’s considered inappropriate behavior. Have each employee sign a form acknowledging that he or she has received it.

Following these points can help your small business get your bottom line back quicker and make sure that you avoid sinking your ship too quickly and unintentionally with a few small slip ups!