What to do if your Business is Sued and how to Reduce the Threat

Why Small Businesses Get Sued 

Small businesses are sued for a wide variety of reasons, from breach of contract and product defects to employee relations and noncompliance with federal regulations. 

The two most common sources of small business lawsuits are employees and customers: 

Employees 

~Wage and salary violations 

~Workplace harassment or hostile work environments 

~Violation of EEOC federal workplace discrimination laws, including bias against age, disability, religion, gender, retaliation, sexual orientation, pregnancy 

~Employee injury as a result of employer negligence 

~Wrongful termination 

~Discrimination in violation of the Immigration and Nationality Act 

Customers 

~Discrimination 

~Having a hidden camera in the bathroom 

~Personal injury on premises 

~Refusal of service claims 

Reducing the Threat of a Lawsuit 

Business owners can do several things to reduce the threat of lawsuits: 

Minimize the financial perils 

Incorporate your business in a way that shields your personal finances from any legal claim and obtain the right business insurance. 

General liability insurance, for example, protects you for a range of potential claims against your business, such as someone slipping on your property or accusing your business of false advertising. Specialized liability policies can be designed around the unique needs of your business, when necessary. 

Be careful what you say and do (to both customers and employees) 

On the employees' side, make sure to have clearly stated policies. 

Line up competent legal help. What to “Do” if you're Sued: 

~Call your lawyer right away 

~Collect information 

~Contact your insurer 

As Doug Adams wrote, "Don't Panic."

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This document is designed for general information only. The information presented in this document should not be construed to be formal legal or tax advice nor the formation of a lawyer/client relationship. 

For more information on this and other topics, please contact Kevin via any of the channels listed below:

📧 kevin@kmckernan.com  | 📞 718-317-5007