No business wants to get sued. Even more so smaller businesses. It can cause a lot of headaches and frustration, not to mention the potential loss of money and reputation. To help protect or limit your business from getting sued by a contractor for a personal injury claim, or at least limit your exposure to such lawsuit, here are 5 Ways To Protect Your Small Business in such a situation.
1. Do Not Set Up Your Business as a Sole Proprietor
While establishing a Sole Proprietorship is the easiest way to start a business, it’s also the riskiest when it comes to what you stand to lose if things go wrong. If you get sued and you lose the case, you could potentially be held personally liable and consequently, some of your personal assets can be seized in order to satisfy the judgment of the suit.
What you should do instead, is to consider creating an LLC or a Corporation and running your business under the legal protection of this business structure. If by chance you are located in the state of Texas, then a Dallas Business Attorney can save you time and money and help you with the formation of this entity. The main advantage of doing this is that such business structures give you protection personally from lawsuits. If a Plaintiff is awarded monetary damages, the business would be held liable, and not you, and if the business is not able to settle the judgment, then the company can simply file for bankruptcy.
2. Put Safety Precautions in Place
Ensuring that the work area is safe will reduce the risk of an injury to any contractor that may work there. In this regard some of the things you should consider doing are:
- Make sure that the inside and outside work areas, as well as the areas around them (like parking areas and smoking areas) are always clean.
- Be sure that exits and fire escapes are always unlocked and always clear of any obstruction or debris.
- Be sure to regularly oversee or inspect the tasks carried out by other employees of the business. If someone else fails to do their job or does it improperly and this leads to or causes an injury to another person, the business will still be held liable.
- Installing video cameras both inside and outside the work area is another way to help increase safety and security, as well as catch any potential injuries on camera
3. Practice Fire Prevention and Have Fire Safety Plan in Place
Some of the things you should consider doing in this regard include:
- Having regular fire drills and practice good fire prevention measures. Ensure that everyone knows what those prevention measures are.
- Having all chemicals and materials that are flammable stored separately, away from any heat source, and in a plastic container
- Having a safe disposal method for rags or materials that come in contact with flammable chemicals
- Having a safe area for smokers, unless smoking is strictly prohibited, and a safe way for them to dispose of their cigarettes; usually an outdoor smoker’s receptacle will do the trick. If smoking is strictly prohibited, you should post visible signs in numerous places and ensure everyone is instructed of the prohibition in writing.
- Ensure everyone is trained in fire prevention from handling and maintaining flammable chemicals and materials to smoking protocols.
- Have a safety plan in case of fire that includes a fire extinguisher in all necessary areas and a written plan that has been provided to everyone for exiting the area. Having a safety drill every now and then is always good practice.
- Have easily accessible and easy to use fire extinguishers.
4. Ensure All Areas Are Well Lit
- Ensure there is proper lighting inside the entire work area, lounge area, and any other accessible area
- Also, ensure proper lighting outside the entire work area including any smoking areas and parking areas that you are responsible for
5. Have Proper Insurance
No matter how careful or prepared you are, there’s always the potential for an accident to occur or a problem to arise. While it’s important to do everything in your power to prevent your business from having a personal injury claim filed against it, you should also be prepared in the event it does happen.
There are many types of business insurance out there that help protect your business in different ways but when it comes to personal injury claims, you will want to have Workers’ Compensation insurance to cover any on-the-job injuries.
You should also have general liability insurance in case someone else has a claim of property damage or injury.
Oftentimes you can get a Business Owner’s policy that will cover a number of things including property insurance and liability insurance. It generally also includes crime, vehicle and interruption of business coverage.
If you need help with protecting your business before a claim arises, understanding the types of insurance you need, or defending your business in a personal injury claim, hire a Westchester business attorney to help.