As a business owner, your top priority is to run a successful and profitable organization, which delivers for its customers and supports its employees. With marketing, selling and profit forecasts taking up most of your time, dealing with a common business lawsuit is probably the last thing on your mind.
The stark reality, however, is that small businesses are at greater risk than most and the trend only looks to increase. For the savvy business owner, then, gaining a better understanding of the legal issues and business documents surrounding the most common types of lawsuit is a must.
Here’s how to protect yourself and your business:
Infringement of trademarks
The owner of a trademark or patent has most likely invested a great deal of time and money into its development. As such, it receives lawful protection under intellectual property legislation. Using someone else’s logo or trademark without permission is a common cause of legal action, as is using something similar on your own marketing material or website – so it’s important to do a trademark search before starting a new business. If your logo or lettering could likely be confused with those of another company, for instance, you could be infringing a registered trademark.
Infringement of copyright
Original pieces of writing, blogs, photographs and artwork are protected from the moment they are created. Using somebody else’s work without their permission is an automatic infringement of copyright and you could find yourself at the center of a legal claim. The main difference between trademark and copyright law is that a writer or artist does not have to register: the very fact the original work exists is enough and claiming that you didn’t see any copyright notice before using someone else’s copy is not acceptable.
Accidents at work
Business owners are responsible for the safety of their employees while they are at work, as well as that of customers and clients visiting your premises. Personal injury claims are one of the fastest-growing areas of business litigation and small businesses lose millions every year as a result. In order for an employee to successfully claim against you, they need to prove that you were negligent or that your actions caused their accident, either directly or indirectly. This doesn’t mean that you have to remove every single element of risk, rather that you have taken reasonable steps to keep employees or clients safe. It goes without saying too, that as an employer you should have the proper employers’ liability and public liability insurance in place within your business documents.
Unfair dismissal
When ending an employee’s contract, it is essential that their dismissal falls into one of several categories. These are: 1) if they were unqualified or incapable of carrying out the work, the dismissal is as a result of gross misconduct by the employee or the continuation of the employment would contravene a law. For example, if the employee drives as part of their job and they have a speeding conviction. If the dismissal is unfair, you could find yourself at the center of legal action. So it’s wise to ensure that there is a written record of each stage in the procedure and that all of your business documents are in good order.
Photo Credit: RaeAllen
Today social media and the Internet can help you weed out potentially litigious employees before you hire them. Same thing with tenants. Do a legal search to find out if they have sued before. I once got a call from a business man attempting to rent an apartment for his “secretary” who obviously provided certain “special” services in addition to regular secretarial work but that wasn’t my concern. I let potential tenants and their friends talk a lot before taking any steps to rent to them. The man rambled on and on about how successful a business man he was and told me the woman had to move because she was suing the landlord of her current apartment and relations with the landlord were rather “strained”. From what I could tell it was a “nuisance claim” where they sue and the insurance company settles rather than investigates and fights the claim. The insurance company then raises the rates of the person who was sued. Needless to say I told the man, “Give me your number and I’ll call you back.” and I never made that call. The Internet today is a wonderful source of information and if given the choice between a person who makes a practice of suing vs a person who does not, you can decide whom to hire.