Common Reasons Businesses Are Sued, and What to Watch Out for in Your Business

For business owners, the threat of a lawsuit is always present to some degree. Even the most responsible business owner may not entirely avoid the risk of being sued. However, there are many steps business owners can take to reduce their risk of being sued successfully. For many businesses, making a few simple adjustments to their business operations, contracts, or insurance coverage can lower the risk of a lawsuit dramatically.

If you own or manage a business, make sure you understand the most common reasons that companies get sued and what you can do to protect your business.

Breach of Contract Claims

Business contracts are crucial to any small or medium-sized business. However, many businesses make the mistake of entering into contracts with vague terms or making agreements they do not fully understand.

One of the most common reasons businesses get sued is failure to meet contractual obligations. If a business fails to provide the goods, services, or payment required in a contract, it may be sued for breach of contract. The company may be required to provide compensation for any losses the other party suffered as a result of the breach. Not only can a breach of contract be expensive, it can also have a significant adverse effect on a business’s reputation.

Discrimination, Harassment, and Retaliation of Employees

It is more important than ever to be aware of state and federal laws governing workplace discrimination and harassment and ensure that your policies and procedures comply. Businesses can be held liable for discriminatory behavior, even if the behavior is not intentional or malicious.

There were over 61,000 charges of discrimination filed with the U.S. Equal Employment Opportunity Commission in 2021. About a third of these charges alleged racial discrimination, and just under a third alleged discrimination on the basis of sex. The most common type of discrimination charge levied against businesses in 2021 involved allegations of retaliation.

Businesses may be accused of retaliation for “punishing” an employee for taking part in a legally protected activity. For example, if an employee is fired after participating in a sexual harassment investigation, the employee may sue the employer for retaliation.

Accidents and Injuries Caused by Negligence

Businesses and property owners can be held liable for injuries caused by negligent behavior. If you own or manage a business, make sure you have safety protocols in place to reduce the risk of accidents and injuries to customers or other individuals. Train your employees on proper safety procedures, inspect equipment regularly, and ensure you have adequate insurance coverage.

If an unsafe condition does exist on the property, make sure there is adequate warning of the hazard so people can avoid it.

Intellectual Property Rights Infringements

Something as simple as using a picture you found online in an advertisement for your business can lead to a costly lawsuit for copyright infringement. Businesses must be vigilant for intellectual property issues when using images, logos, music, or other content. If something is not the original work of an employee at your company, do not use it without carefully checking for intellectual property rights. If you want to use someone else’s work, you must get express permission from the owner or creator of the work.

Contact our Naperville Business Law Attorneys for Help

At the Gierach Law Firm, our Naperville business lawyers understand the challenges small and mid-sized businesses face. We can help you take the steps needed to reduce your risk of being sued as much as possible. Our skilled team offers outsourced general counsel services and can provide comprehensive legal advice to ensure your business is protected. Call us today at 630-756-1160 for an initial consultation.

Source:

https://www.zippia.com/advice/employment-discrimination-statistics