Avoid Legal Action! How Businesses Protect Themselves From The Law

by Daniel Bell

Every major business has a horror story about the legal system. Running a company requires watertight legal protection, or the consequences can be devastating. One lawsuit can cripple a small company’s finances. Not to mention their reputation if the trial is covered in the media. No small business can afford this trouble, and so crucial steps must be taken to avoid it. In the business world, lawsuits raise their ugly head from all sources. Intellectual property is one huge area of debate and controversy. Another is the issue of employee and customer liability. Then there’s indemnity, data breaches, health and safety, and contract law.

It’s enough to give you a headache just thinking about it. In fact, many companies ignore it completely, taking the chance in an incredibly dangerous business world. The truth is that your company will face legal action at some point down the line. Every business is vulnerable. Heck, even Obama can be sued! As you grow larger, companies and individuals will take aim, so learn to protect yourself.

In this article, I’m looking at how businesses protect themselves from the ground up. As a business leader, you have a responsibility to protect your company (and yourself!) If you don’t, your assets and your employees are at risk. Follow this advice, and you’ll enjoy a future free of pesky lawsuits!

Patents

If you’ve created a new product, app, or idea, you need to protect it. Right now. A patent is a legal document that confirms you own the rights to a concept. It proves that you invented the idea or product and that it’s yours to exploit. It means you can stop others from copying you, and get access to profits from those who do. It takes a long time for a patent to be awarded, so start the application process early. If you don’t do this, you could find yourself tied up in legal action for years to come.

Copyrights

Copyrights are similar to patents but tend to refer to an artistic asset. If you deal with photography, music, or artwork, you need the express permission (or copyright) to do so. If you have created something, then you typically own the copyright to it. However, if you’re using any images or assets for your company without permission, you could be violating the rights. Make sure you have a license to print, publish, or distribute your content or assets.

Trademarks

We’re in the same ballpark here again with trademarks. A trademark, however, is traditionally associated with your brand. That means securing your logo, company name, and product names against theft. Let’s say you create a wildly popular website under a particular name and logo. If you haven’t trademarked it, someone else can. And they can then sue you for profits and access. Always make sure you register your trading name and logo immediately.

Watertight contracts

Business functions effectively when there are clear and concise contracts. Strong agreements are great for both sides of the deal. Whether it’s an employee contract or a business-to-business deal, everyone likes to know where they stand. A secure and watertight agreement ensures that. It also goes much deeper than that. A watertight contract means that no element can be exploited or manipulated. It lays out clear guidelines in accordance with the law. Even new startups should implement strict and tight contracts. Employment law for small businesses matters, just as it does for the larger companies.

Be careful what you say, and do, in public

As the leader of a business, your words and actions are monitored carefully. As the company grows larger, your public profile increases. Many of the things you do or say in relation to other businesses could be construed as libel. Recently, high profile executives at Uber have been caught in media crossfire for outspoken views. If it can happen at the biggest companies, it can happen at the smallest ones!

Good training and hiring

While you can control your personal words and actions, it’s much more difficult to do so when there are employees involved. It’s your job to keep track of what your representatives are saying outside the office. It all starts by hiring the very best, and training them effectively. When you trust your employees and management teams, there is less pressure. Remember, your company is accountable for their actions and opinions.

Health and safety audits

Top businesses recognise their responsibility in the realm of health and safety. They know that any potential injury or health condition in the workplace could result in a lawsuit. Personal injury claims against employers are rising sharply, and it’s costing businesses thousands. That’s why sensible companies invest in health and safety audits. They make sure that their workplace satisfies health and safety laws and guidelines.

Insurance

Business insurance is a catch-all solution that helps protect companies from all angles. Of course, the policies vary across the board. But, smart business owners invest in the most comprehensive insurance option. A watertight policy will protect businesses against lawsuits from inside and outside the company. It will protect them against indemnity charges and libel cases. It will also cover theft, fire, and damages to the company assets.

Choose the correct business structure

Every company must choose a legal business structure, and register with the government for tax purposes. By doing this, you set yourself up as a sole-trader, a partnership or a limited company. Now, each of these has different legal obligations. For example, sole-traders are not separated from their business. If they are sued, their house or car is not safe from repossession. As your company grows, it’s important to separate your personal life from the business finances.

Protect data files

More and more businesses find themselves in the spotlight over data breaches. If confidential data is hacked and distributed, there are immeasurable legal consequences. As a company, you are trusted to protect your customers’ data. That means protecting it behind complex storage units, and encrypted firewalls.

Using a combination of these techniques, modern businesses can protect themselves from legal action. No company is entirely safe from lawsuits, but you must take every possible precaution. No matter how big or small your business.