Although a lawsuit can never be a pleasant experience for any business, it not only affects time and money, sometimes harms your business reputation too. It becomes hard for a business manager to carry day-to-day activities smoothly with the mental and financial burden of lawsuits. Even in some cases, a lawsuit becomes a way to put businesses out of business.
Therefore, it is important for every business owner to know about common business lawsuits and ways to handle them. Your knowledge can help you to minimize the risk and take prompt actions. So, without further ado, let’s learn the common lawsuits to protect your company;
What are different types of corporate lawsuits?
Corporate lawsuits can be filed by employees, clients, vendors, or other businesses. But your business needs to be prepared for the charges and law all the time. As per the study, litigation addiction in the United States, small businesses costs more than $100 billion annually for lawsuits. It does not matter whether it was your business mistake or not, but you have to spend time and money to protect your business.
Here we have a list of common types of lawsuits;
- Breach of Contract
This type of lawsuit arises when any businesses fail to fulfill the obligations mentioned in the legal agreement. When a breach of contract is with the vendor or client, it can involve damaged goods delivery, failure to deliver goods, delay in payment or revealing trade secrets, etc.
- Discrimination Against Employees
Your business can head to court against employee discrimination cases. These could involve age, gender, race, sex, identity, or religion-related discrimination among employees.
- Premises liability
When the injury arises at business premises due to defective or unsafe business conditions, IT could be employees when working at construction sites and not using adequate safety measures, or accidents arise due to lack of locks and security, cameras, or poor lighting.
- Slip-and-fall accidents
In some cases, business is held liable for slip and fall accidents, especially when the floor is wet and ice is there. It could cause minor or major injury.
- Auto accidents
When your employees are driving commercial vehicles, then the business is held liable for any accident. In this case, commercial auto insurance can step into your shoes for fulfilling claims.
- Discrimination against customers
As the companies are not allowed to discriminate among employees, they cannot discriminate against customers too. Everyone should be treated equally with the same company norms.
Harassment is one of the common lawsuits, and most companies with lenient company policies are facing this issue. Even recently with the #MeToo moment unveils many reputed companies and high-profile celebrities around the globe. It can involve bullying, sexual harassment, psychological aggravation, and physical attacks.
- Intellectual property rights
Using another person or company’s photo, songs, or videos for your brand’s promotion is not allowed. If any company is found doing so, other people can take legal action against for stealing their information.
How to handle corporate lawsuits?
When you are handling business, you must learn the basics of how to tackle lawsuits without affecting work efficiency.
- Review case with an attorney
The first thing when you receive a lawsuit is to communicate it to your business attorney. Because business lawyers are professionals and experienced in handling such suits, your lawyer will be able to find out whether everything mentioned in the lawsuit is valid or not. If there is inappropriate information related to a person or entity, you may be liable to dismiss the actions.
If everything is fine, you can proceed with legal actions. You will need to submit all the essential corporate law documents supporting your case. Keep in mind, every recording, photo, email, web page, and voice message is important to prove your point against the plaintiff in court. So, do not forget to discuss each detail with your attorney.
- Inform your insurance provider
Most companies are paying varieties of insurance premiums to protect businesses from any uncertain conditions. This is the right time when you can avail the benefits of an insurance premium. For instance, if you have covered business under a professional liability policy and any of your clients take you to court with a financial loss allegation. You can settle the case with insurance company assistance. Not only this, but you can also pay attorneys’ fees, court costs, and any settlement from judgment out of insurance. Bear in mind, if you have taken general liability policy read the company policies carefully and under what areas it can save you.
- Decide how to proceed and respond.
When you receive the lawsuit from the court, you have to revert on it within 30 days. These days could vary from state to state. Therefore, you need to prepare well how to respond to it with the help of a corporate attorney. There are some cases for short money or nonmonetary claims, and you need to see the nature of the case and settle the dispute as soon as possible. In many cases, there could not be your business’s fault. Still, to protect your business reputation, you have to look into the quickest way for a settlement solution.
When your business is insured under a particular policy, you should consider the insurance coverage level in the first place. If you need more money to settle a claim, you can look for alternative sources of income. Remember, when you are going to revert, do not exceed the 30 days limit. Otherwise, there could be higher chances that the court will give judgment in favor of the plaintiff, and you will lose the case.
Let’s Wrap Up
The litigation process can be long and tiring. Therefore you need to prepare yourself and remember few things;
- Never tries to hide anything from the attorney.
- Take prompt actions with every detail. Try to collect all the essential information as soon as possible.
- Always stay focused on your business irrespective of the conditions.
- Keep changing business policies with current corporate regulations and inform HR or concerned people to take serious action in case of any misconduct.