Legal & Business Services by
Angel M. Latterell, Esq.

Risk Management: Safeguard Your Business From These 3 Common Causes For Litigation

Each year, between 35% to 53% of small businesses in the U.S. are hit with a lawsuit, according to the Small Business Administration (SBA). With statistics like these, it may not be a matter of if your company will get sued, but when you will find yourself in a conflict that could result in a lawsuit.

To make matters worse, if you get sued, even if you win the case, you may still be on the hook for lawyer’s fees and court costs, not to mention the time you spend defending yourself and the potential damage to your reputation. This is exactly why we support our business clients to stay out of court and out of conflict, with proactive business planning.

In service to keeping your business out of court and conflict, here we will cover three of the most common sources of court and conflict for businesses we work with. By understanding the causes of potential legal trouble, you can take the necessary steps to prevent disputes before they occur.

1. Lawsuits By Employees

Although you may not like to think that one of your team would ever sue you, your employees (or independent contractors) are one of the most likely sources for litigation. In fact, nearly one in every five small businesses will get sued by a team member.

The most common lawsuits arise when a team member needs to be let go, and he or she feels mistreated (rightly or wrongly) in the process. If you operate like many business owners, without clear agreements with your team members and without formal processes for handling hiring and firing, you may only find out when it is too late that you weren’t the great boss you thought you were.

By working with an experienced business lawyer like us, you can dramatically reduce your chances of getting sued for employment-based claims—or reduce your out-of-pocket costs if you do get sued due to no fault of your own. From creating sound employment agreements, advising you on the appropriate insurance coverage, and helping you establish workplace policies and procedures in compliance with federal and state laws, we can support you in every aspect of employment law matters for your business.

2. Lawsuits by Clients or Customers

Every business owner must deal with the reality of unhappy clients or customers. You cannot please all the people all the time, but you can establish your process for selling your products and services to minimize the risk of court and conflict when you do have an unhappy client or customer. 

The way you present your client or customer agreement, what it says, and how it says what it says, plus how you get paid and handle customer complaints, can mean the difference between an unhappy customer, who you can turn into a future raving fan, and an unhappy customer, who ends up suing you. We help our clients turn client or customer complaints into learning and growth opportunities and head off future problems by creating template agreements and offering training on how to present those agreements for the best possible outcome of a happy, paying client. 

You are much better off paying a little more upfront to create a thoroughly protective agreement and learning how to present it, so it sets up your client and customer relationships for success, rather than trying to save a few dollars by downloading a do-it-yourself agreement online that will not keep you out of court and conflict. 

3. Lawsuits for Third-Party Injuries

If you or one of your team members is injured on the job, that is typically covered by worker’s compensation insurance. But if a client, vendor, or another third-party is involved in an accident in your place of business, you can be sued for negligence, often known as a “slip-and-fall” lawsuit. 

If you allow members of the public onto your property, you have a duty to provide for their safety. If a visitor to your business can prove that you did not take the proper precautions and he or she is injured as a result, that individual can sue your company to pay for their medical bills, lost wages, and even their pain and suffering. Depending on the severity of the injury, personal injury claims can be among the most expensive of all types of litigation.

Your primary defense against personal injury suits is to have adequate liability insurance coverage in place. As your Family Business Lawyer™, we will recommend the best types and amounts of liability insurance for your business operation. Meet with us to discuss your specific coverage needs.

Your Very Own In-House Legal Counsel

The risk of lawsuits is simply an unfortunate fact of life for today’s business owner. In fact, most large corporations have in-house teams of lawyers on retainer to defend them against this ever-present liability. And with us, as your Family Business Lawyer™, you will have your very own trusted legal counsel in your corner.

Meet with us, your Family Business Lawyer™ to discuss the specific legal safeguards you should have in place. Whether it is investing in the right insurance coverage, reviewing and updating your agreements, or helping you navigate the complexities of employment law, we always have your back. Contact us today to learn more.


This article is a service of Angel Latterell, Family Business Lawyer™. We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule.

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