Lawsuits against small businesses add up to more than $100 billion every year. Roughly 53% of all small businesses being involved in a lawsuit at any given time, according to the Small Business Administration. With these types of statistics, if you’re a small business owner, it’s more likely a matter of when you’ll be sued than if you’ll get sued.
Rather than waiting until it happens, it’s better to seek legal advice now before you get thrown into a situation you’re not prepared for. Although there are innumerable reasons why you might face a lawsuit, generally they fall into three situations: You’re sued by another business. You’re sued by a customer. You’re sued by an employee. Here are 6 reasons why businesses get sued.
Issues Regarding Intellectual Property
Intellectual property law involves the illegal use of someone else’s creations, inventions, or other works, such as music, writings, logos, designs, and photography according to Randolph Law Firm. Even if you accidentally used someone else’s intellectual property, you could be sued and held legally accountable for copyright infringement.
You could face a legal battle if there is any perceived discrimination towards your employees or customers. Discrimination due to age, gender identity, race, sex, religion, pregnancy status, or disability is unacceptable in the United States under Title VII of the Civil Rights Act of 1964. Be sure to read up on your employees’ and customers’ rights under the law.
Breach of Contract
Your small business could be subject to a lawsuit if you fail to carry out the terms of a contract. Situations such as failing to deliver goods or services, failure to pay for goods or services after you’ve received them, and delivering incorrect or damaged goods might put your small business in a legal battle.
Property Accidents and Injuries
Accidents such as slip-and-fall injuries add up to over one million emergency room visits every year in the United States. If an accident or injury happens on your property, you could be responsible for paying legal fees and medical bills. Alternatively, if you damage a client’s property, you could find yourself paying thousands of dollars in repair costs.
Workplace bullying, sexual harassment, psychological or physical aggravation, and attacks are never okay. These types of situations should be addressed through comprehensive Human Resource guidelines and taken very seriously so that everyone knows exactly what is expected of them when it comes to proper behavior. Have policies in place to avoid potential litigation.
Business owners should be fully educated on labor laws to avoid potential lawsuits. For example, according to the U.S. Department of Labor, you must pay your employees a minimum of time and a half their pay per hour when they work more than 40 hours in a week. Refusing to do so, or trying to cut their pay, will get you in legal trouble that will cost you a lot more.
If you want to avoid potential lawsuits, hire a reputable lawyer like this workers’ comp attorney in San Bernardino that knows and understands the legal ins-and-outs of running a business. They can help inform you of the potential risks that could lead to litigation against your small business.