These days, consumers are far more knowledgeable about the law and consumer rights which means that if you give them the opportunity to sue you, they’ll likely take it. While you should never do anything that purposely puts consumers at risk, you will occasionally make mistakes as a new business and it’s important to look at how you can protect yourself from being sued over something like an honest mistake or a misunderstanding.
Even if you’re not in the wrong, some consumers will be infuriated by certain things that you do and could potentially take you to court over something ridiculous. So in this article, we’re going to take a look at four ways that you can avoid getting sued as a small startup.
#1: Keep Your Personal Life and Business Life Separate
One of the first things you should do as a business owner is to separate yourself from your business. There are many entrepreneurs in the world that try to add too much of their personality into their social media pages which are primarily designed for corporate purposes. This creates blurred lines between their business and social life and this could potentially have negative effects such as consumers taking what you say about political topics and applying it in a negative light to your business or its products.
In addition to your personality bleeding into your business, you also need to think about how you can financially separate your personal and business life. This is one of the reasons why it’s important to separate your assets so that in the event that you are sued, your personal belongings and financial situation won’t be put in the line of fire. In other words, it’s best to have a trust own the business and not have it owned by you as the individual.
A trust is essentially a legal entity that files its own taxes and can even own property, assets, businesses, money and so on. If you establish your business through a trust then your trust will be responsible in the event that you’re sued, leaving your personal financial situation and belongings out of the debate so that even if you do lose in court, your personal life won’t be affected.
#2: Protect Both Your Personal Data and Your Customer Data
Due to regulations such as the GDPR threatening hefty fines against those that aren’t taking their data security seriously, it’s become vital to take a deep look at your security practices to ensure that both your personal and customer data is secured. This is often done with the help of a third-party computer security company that can help you not only install countermeasures against cybercriminals but can also educate your employees so that they understand how to avoid becoming a victim to cybercrime or accidentally doing something that could expose your office network.
There are plenty of solutions available to help you safeguard your data, such as using cloud services and data rooms. If you’re wondering what is a data room, then the linked article will help you get a better understanding of how a virtual data room can help protect sensitive data such as contracts, legal files and transaction information. While it can seem like a hassle to set something like this up, it’s an essential part of what it means to be a secured business that is able to protect its customer’s data. Failing to do this will put you under fire for negligence and could destroy your business.
#3: Hire a Lawyer That Knows What They’re Doing
One of the most important people to hire when you start to pick up traction is a lawyer. A business lawyer will provide you with the protection that you need to ensure you’re always protected and never breaking the law with your business activities. The law is a complicated, convoluted and difficult system to understand, so having someone that can not only interpret it for you but also help you take advantage of it is a blessing.
A business owner should aim to build solid relationships with a lawyer for several reasons. Firstly, it helps them understand what your business is, how it operates and what kind of laws you’ll need to understand in order to take advantage of their expertise. Secondly, creating a healthy relationship with your lawyer ensures that they can make time and go the extra mile to help you as a regular client. Lastly, getting to know your lawyer will ensure that you have a trustworthy and reliable person to help defend your business should you come under fire with lawsuits.
Without a lawyer, your business is going to be abused by people that understand the law better than you. If you don’t have a lawyer and you’re being sued or someone is threatening legal action against your business (even if the reason is completely ridiculous) then you’ve already lost the battle.
#4: Watch What You (And Your Employees) Say and Do
The internet is no doubt a huge platform to help you grow your business, but you have to remember that what you say and do on the internet will come back to haunt you if you’re not careful. You need to take responsibility not only for your words and actions but those of your employees as well. This is why many people that work for large companies put something along the lines of “my opinions are my own and do not reflect that of my employer” on their social media profiles–they don’t want their words and actions to be associated with their employer.
Of course, this also applies to the real world and not just the internet. If your employees are seen acting up and causing trouble in public, then it does reflect poorly on your business as well, especially if they’re in uniform or are there to represent your business. In short, make sure you’re always watching what you and your employees say and do so that you don’t draw unnecessary negative attention to your business and risk being sued.