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Litigation Cases That Small Business Owners Face on a Daily Basis

All small business owners take pride in the success of their businesses. For most business owners, it not only took blood, sweat, and tears, but it also took several failed attempts and almost going completely broke. But the moment they tasted success, every struggle was well worth it.

Unfortunately, with running a business, there’s the aspect of risk as well. One of the biggest fears of successful business owners is to endure the painstaking process of an expensive, drawn-out lawsuit. According to the US Chamber Institute for Legal Reform, litigation for small businesses cost them over $100 billion every year. In 2016 alone, the US tort system hit a high of $429 billion.

That number is pretty astounding, but that just goes to show you just how risky it can be in running a business. Granted, some of the lawsuits are fair and just, there are also lawsuits that small businesses lose to people who sue businesses solely for financial gain.

As a business owner, this is a risk you’ll face every day, but that doesn’t mean you have to walk around on eggshells out of fear that someone will sue you. Ultimately, prevention is key and knowledge is power. The best way to prevent an issue in the future is to hire a business law firm to represent your company before an issue arises.

Business lawsuits typically fall into three different categories:

  • Your business will be sued by an employee
  • Your business will be sued by a customer or client
  • Your business will be sued by another business

By knowing the different types of lawsuits you’re up against, you can operate your business in a way that lowers your risk of legal action. In addition to taking the necessary efforts to avoid litigation, it’s important to know you can’t avoid it completely. Accidents happen and there’s just no way around it.

The best thing you can do as a preventive measure in protecting your business against litigation is to make sure you invest in small business insurance. Based on the type of business you have, you can find a policy with the coverage you need.

If you’re a small business owner and haven’t yet endured the stress of facing a business lawsuit, that’s wonderful news… keep up the great work. But it’s important that you at least make yourself aware of the types of lawsuits you have the potential to be up against.

It’s not a matter of if it will happen… it’s a matter of when it will happen.

Most Common Lawsuits Small Business Owners Face On a Daily Basis

Slip and Fall Accidents

If you are the owner of a brick-and-mortar store, your business is automatically at risk for a slip and fall accident. These accidents typically happen due to wet or slick surfaces resulting in serious injuries like broken bones, blunt force to the head, or a nosedive to the face.

Losing slip and fall cases can cost businesses upwards of hundreds of thousands of dollars. Make sure you have an insurance policy in place that covers this type of damage whether it’s an employee or customer

Employee Discrimination

Workplace discrimination against employees based on their age, disability, race, sex, pregnancy status, and religion are all grounds for an employee to take legal action just the same as if an employee sufferers damages from wrongful termination or not receiving overtime pay.

Yes, some employees will invoke whistleblower cases but they’re not very common simply because most people want and need to work. It’s in your best interest that in running your business, you treat all employees with the same respect as anyone else.

Breach of Contract

If you’re being sued for breach of contract that means that you’re being sued because you failed to carry out your terms of a contract or didn’t complete your terms of a contract. This type of litigation typically happens from another business. This can be due to failure to pay or deliver, delivering damaged products, etc.

As a business owner conducting business with other businesses, do everything in your power to maintain professionalism. Whatever you agreed to do in your contract, make sure you uphold your responsibilities to prevent any confusion and legal action.

Intellectual Property Rights

Whether it’s your company name, logo, or slogan, there’s the potential that another business will say that you stole it from them. To protect your business, you definitely want to make sure you have patents and copyrights in place but you may also want to get assistance with an air-tight non-disclosure agreement, and for online businesses, get an exact match domain name.

Customer Discrimination

Customer discrimination is a bit of a tricky and delicate area. With businesses, your main focus and goal are to make and keep your customers happy. But the moment you’re not able to give them what they want, they can sue you for discrimination if they felt they were being discriminated against but especially if they know you did something special for another customer and wouldn’t do the same for them.

As far as discrimination goes, the best rule to abide by with your business is to treat all customers equally. If you’ve been in the business long enough, you know how demanding customers can be, and if they witness or experience inequality in your services, it can be extremely costly for your business.

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