How To Reduce Your Business's Exposure To Liability Claims

27 February 2018
 Categories: Insurance, Blog


Facing lawsuits every now and then is not good for your business; it is costly and even tarnishes your business' name. That is why it is in your best interest to minimize your exposure to liability claims and potential lawsuits. Here are some of the ways in which you can do this:

Don't "Shake Hands" On Agreements

Written agreements are more protective than verbal agreements so avoid the latter. Your purchase contracts, supply contracts, employee agreements, nondisclosure agreements and any other agreements that involve you and another party should be written down and signed by both parties.

There are several reasons verbal agreements can lead to lawsuits. For example, the other party may go back on their word after a verbal agreement. Verbal agreements are also easy to misunderstand; written agreements are safer because you can scrutinize them again and again.

Understand the Legal Intricacies of Your Industry

The single best advice on how to avoid being sued is to follow the laws and regulations of your industry to the letter. This is easy in theory, but in practice, you may not even know the rules and regulations you are supposed to follow if you don't investigate. Scrutinize both federal, state and city laws touching on your industry and make them an integral part of your business operations. You also need to get all the permits and licenses for your business. That way you reduce the avenues through which others may sue you.

Don't Ignore Even the Simplest Client Concerns

Lawsuits don't always start out as serious confrontations with clients; some start out as small complaints that are ignored or assumed and then blow up into serious things. Therefore, you can avoid lots of potential lawsuits by treating all your customers' concerns seriously so that you can nip them in the bud before the customers can file lawsuits.

Have Your Contracts Prepared By Experts

Lastly, it's a good idea to have the contracts prepared by industry or legal experts to avoid misunderstandings. It is particularly useful to make the contracts as simple as possible so that the public don't have problems understanding them. Don't insist on industry jargon or legal terms that only you and your legal team understand; the more people sign your contracts without understanding them the more they are likely to have complaints and sue your business.

Despite your best efforts, however, you can't be sure that you will never face any business liability claims. That's why you need a suitable commercial liability insurance coverage that can protect you from such risks. Talk with an agent from a company like Scovotti Insurance to learn more.