Civil Claims or the High Courts? Learn What Type of Lawsuits You Can Expect As A Small Business

Between 36 to 53 percent of small businesses get involved in lawsuits at any given year. As a business owner, you may think that owning an insurance policy is enough to protect you from lawsuits.

Yet, understanding and learning all there’s to know about potential small business lawsuits is the best approach.

Do you know what type of lawsuits you can expect against your business?

Maybe you received a lawsuit against your company from another business or employee. Don’t know what this claim means for your business?

We’ve got you covered. We’ll tell you all about the most common types of lawsuits filed against businesses and what to do when the unexpected happens.

Read on to learn more and prepare your business for any claim today.

Small Business Claims: What Type of Lawsuits to Expect

It doesn’t matter if you have been in business for 1 or 10 years. Any customer, employee or business can sue your company at any given time.

You may think that learning about potential lawsuits against your company is too complicated or too much work.

Yet, learning about the types of lawsuits can help you prepare your business for any future claim. If your company holds offices abroad, it’s recommended you learn about how the legal system works in those countries.

Because your potential lawsuits change according to the jurisdiction where your offices are.

If you hold locations or even virtual offices in India, you should read this site to learn more about how the high courts work in that country. 

Keep in mind that your jurisdiction changes on a state and county basis as well. An attorney can provide insight into the laws in your state and county you should consider.

Don’t know the types of claims you may receive against your company? Here are the 4 most common types of lawsuits you can expect against your small business.

1. Contractual Disputes

It doesn’t matter if you provide a service or sell a product, either way, you may end up with a contractual dispute in your hands. Clients and suppliers alike may violate legally binding contracts.

To prevent these disputes, it’s recommended that you consult an attorney before signing any contract.

Some contracts that may end in a dispute are non-disclosure, service agreements, among others. You should consider using a uniform contract for your services.

An attorney can draft the right contract for your business to ensure all parties involved hold their end of the bargain.

2. Fraud Lawsuits

These lawsuits arise due to misrepresentations or unfair treatment of your customers. It’s recommended that you hire an attorney during your business development process to protect your company from these lawsuits.

Sometimes these lawsuits are due to employee misconduct. You should consider providing yearly training to your employees. This training may prevent any misconduct that can cause a fraud lawsuit.

3. Intellectual Property Lawsuits

You may think that only manufacturers must keep intellectual property in mind. Yet, that’s far from the truth. Does your business have a logo or slogan?

Do you share content online? If you answered yes, you must prepare for any intellectual property lawsuit. These claims arise from using materials such as images, logos, slogans or any other type of content.

If you use it as your own when it belongs to someone else, you expose your company to an intellectual property lawsuit.

Believe it or not, you may be violating intellectual property laws without knowing it. It doesn’t matter if you didn’t have knowledge of the ownership, you may be responsible for damages and profits from the use of the material.

Before using any image, content or logo, it’s recommended that you verify that you are free to use it in your business. 

Consider using royalty free images or hiring a graphic designer for your marketing material.

If your company has a slogan, check that it isn’t used by another business. Also, you should consider getting it registered to own the rights to the slogan.

4. Employment Law Disputes

These claims are one of the most common types of lawsuits filed against businesses. These lawsuits relate to violations in your employment practices.

These may relate to your hiring process to the workplace environment.

Some examples of the most common employment law claims are sexual harassment in the workplace and wrongful termination. When it comes to these claims, you should keep in mind the applicable state and federal laws.

The best way to prevent these claims is by establishing your own employment practices to follow the applicable laws.

Your Small Business Was Sued: Now What?

Most business owners panic when they receive a lawsuit. But, that is the worse thing you can do. You should take a step back and learn about the claim against your company.

What is the claim? Is it the first time this person or company sues you? Have you dealt with these types of claims before?

These questions can help you gather more information about the lawsuit to decide the best approach. If you own a business insurance policy, it’s recommended that you contact your insurer.

Your insurance policy may cover the lawsuit or part of the expenses.

Every lawsuit is different. Even if it isn’t your first rodeo, you should have your own lawsuit contingency plan. 

Before contacting an attorney, you must learn as much as you can about your lawsuit.

Who are the parties involved?

Did you commit the claimed violation? During this process, you should gather all documents and evidence related to the lawsuit.

After you understand the lawsuit against your business, you should consult an attorney. They can provide insight into the lawsuit and possible outcomes. Consider getting your initial consultation with several qualified attorneys.

Don’t put a price tag on your legal protection, choose an attorney that specializes in this type of lawsuit. Discuss with your lawyer, your options and possible outcomes. Decide what’s the right approach to obtain the best outcome for your business.

Bottom Line

The best way to prepare your business for any legal is by understanding the types of potential lawsuits. You should consider hiring an attorney to develop internal processes.

These measures can protect you from future claims.

The nature of your business and industry will determine the type of lawsuits parties may file against your company. Keep in mind that you should learn about the applicable laws where your offices are located.

Was your company sued? Need to hire legal representation? Search our directory to find the right attorney today.