Ohio business owners know that a lawsuit can spell disaster for their business. Between the cost and time involved in litigation and the potential damage to business reputation, even one lawsuit can mean the difference between the ultimate success and failure of your business.
Here are some tips that can help you protect your business.
Choose the right business structure
One of the best ways to protect your business starts at the very beginning. The type of business structure you choose can make a major difference in what happens if you are sued.
Many business owners operate their business as a sole proprietorship. The problem with this structure is that your personal assets, along with your business assets, are at risk if you are sued.
Structuring your business another way, such as a limited liability company or a corporation, protects your personal assets by shielding them from liability in a lawsuit. While these types of structures are typically more complicated to set up and involve more paperwork, the protection you receive is often worth it.
Good liability insurance
Additionally, liability insurance is a must. Remember that not all lawsuits allege that someone did something intentionally. Many business lawsuits are based on negligence, such as if a customer slips and falls while on property.
Do not skimp on liability insurance, figuring you will always act ethically and in good faith and therefore have little to no chance at being sued. Accidents and unfortunate events happen and a solid insurance policy can save your business from financial ruin.
Protect your digital data
Cybersecurity and data protection is another area worth investing in. We regularly hear stories about companies being sued after their data is hacked and personal or confidential information is released to the public.
This type of problem can usually be prevented by having strong cybersecurity in place. You should also always back up your files to a secure location.
These few simple actions can save your business thousands in litigation costs. If you do find yourself facing a lawsuit, act quickly and develop a plan to address it.
