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Most Common Reasons Small Business Owners Get Sued

Most Common Reasons Small Business Owners Get Sued

Setting up a small business is a complex process and it requires investing lots of time and money. Having to deal with lawsuits can completely destroy the investment and small business. This is why it is critical that you take steps to put in place the appropriate protective measures that will protect you and your business. Here are some common reasons why small business owners get sued and ways to avoid them.


Liability is possible in almost every business and it is impossible to negate all risks of liability. However, you can take out various types of insurance to protect yourself and your business as much as possible. This can include but is not limited to business liability insurance, product liability insurance, property insurance and cyber liability insurance.
The types of insurance you get is specific to your business needs and a small business lawyer
can help you determine what is necessary.

Agreement disputes

Over time disagreements are bound to occur and this can be with clients, employees, and partners. These disagreements can arise because of pay issues, working conditions and discrimination. It is always a good idea to follow HR guidelines as closely as you possibly can. However, another way to protect yourself is by having strong contracts in place for your clients, employees, and partners. A small business lawyer can help draft these contracts and ensure that they include all of the relevant information.

Theft of files and/or confidential information

It is also possible to get sued if certain files and/or confidential information is stolen from you. A good way to protect against this is to ensure that your antivirus software is always up to date. In addition, it is a good idea to invest in security measures if your small business is operating out of an office or storefront. 

Intellectual property

With the advancement of technology, breaches of intellectual property have become more common. A breach can result from something as minor as using a photo in a blog, so you need to be very careful with everything that you use. It is a good idea to register all of your intellectual property as well.

In general, incorporating your small business may be a good idea as it will allow you to separate your personal finances, thus, providing you with some protection if you are faced with a lawsuit.

What to do when facing a lawsuit

If as a small business owner, you are sued or you are anticipating a lawsuit, it is important that you stay calm and quiet because an emotional response may make the situation worse. The best thing you can do is refrain from making any statements and contacting your small business lawyer instead. He/she will be able to formulate a strategic response while protecting you and the business.

This blog discusses some of the most common reasons why small business owners get sued, but there are many more. As a small business owner, getting sued should not be one of your worries. That’s why it is a good idea to consult with a small business lawyer when starting up your company and he/she can help you put in the appropriate protections.

If you have any questions or concerns about your small business, do not hesitate to call and book a consultation. 

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