How Do I Protect My Small Business from being Sued?

How Do I Protect My Small Business from being Sued?

How Do I Protect My Small Business from being Sued?

Starting a small business can be exciting and fulfilling. However, at the same time, this type of venture can come with risks. Even when you believe you have done everything you can to protect your enterprise, unexpected issues can arise. One problem a small business can encounter is being sued. A lawsuit could be devastating to you and your enterprise. Therefore, as an owner, you will want to know: How do I protect my small business from being sued?

Small Business Lawsuits

Most businesses will be sued at some point during their life span. Further, approximately 12 million contract lawsuits are filed against small businesses annually. In addition, 36% to 53% of small businesses are sued, and 43% of all small businesses are threatened with a lawsuit every year.

Will My Small Business be Sued?

If you are worried your small business will be sued, you are not alone. According to a recent report, 75% of small business owners have the same concern. However, in order to evaluate whether your small business will be sued, you will need to assess your risk level. Depending on your business type, you may have high or low exposure to liability. For instance, if you operate a retail location, you may be more at risk of being sued by a customer over a personal injury matter. Likewise, you assume more potential liability when you have a larger workforce, a transportation fleet, and multiple locations.

The majority of small business litigation concern breach of contract claims. Is your enterprise party to several contracts? If the answer is yes, your potential risk of being sued for breach of contract may be higher.

The best way to assess the likelihood of your small business being sued is to consult with an experienced small business attorney. Your lawyer can help you identify areas where you have increased liability risks. 

How Much Does a Business Lawsuit Cost to Defend?

According to a recent report, the average liability suit costs at least $54,000. Contract disputes can be expensive as well. Further, a small business earning $1 million yearly would typically have $20,000 in litigation fees.

Business lawsuit expenses can vary, and the expense will depend on numerous factors. There can be obvious costs, such as hiring an attorney and paying court fees. Additionally, these cases usually involve discovery, and then there is also the expense of having a trial. Depending on the case, discovery can be a long-drawn-out process involving depositions and thousands of documents. After the case is over, one party may have to pay damages to the other party.

Protecting Your Small Business from a Lawsuit

Owning a small business may always involve running the risk of being sued. However, there are some steps you can take to protect yourself from litigation and its potential consequences. The first and most important step to take to protect yourself from a lawsuit is to consult with an experienced Florida small business attorney. Your small business lawyer can help you evaluate your enterprise, determine your liability risks, and develop protective strategies. Further, your attorney can help you negotiate and create contracts that support your operations and protect your interests.

You can also protect your small business through your formation. By forming a limited liability company (LLC) or partnership, or corporation, you can help safeguard your personal assets. Another way to help mitigate the risk and expense of a lawsuit is by keeping accurate records. By keeping precise documentation, you can provide support for your position. Additionally, these types of records may be all that is needed to satisfy the other party and resolve the dispute before there is litigation.

Contact an Experienced Florida Business Lawyer

Attorney Richard Sierra at the Florida Small Business Center assists clients like you with commercial leasing, business, and litigation matters. As always, Our Goal Is to Help You Succeed™. For an appointment, you may call us at 1-866-842-5202 or use the contact form on our website. We represent clients throughout the State of Florida, including Coral Springs, Coconut Creek, Boca Raton, Delray Beach, Pompano Beach, Sunrise, Fort Lauderdale, Miami, West Palm Beach, Jupiter, Deerfield Beach, Stuart, Port St. Lucie, Orlando, Naples, Fort Myers, Sarasota, Tampa, and surrounding communities.

Latest Posts Posts

Stay up-to-date

Enter your email address and we’ll let you know when we post more content.

Thank You!​

We will be in contact with you very soon!