Ensuring your business runs smoothly is the main priority of any small business owner. In such a volatile business environment, implementing a risk management strategy is key. Business owners who effectively avoid, mitigate, transfer and accept risk have more chance of longevity and success.
A major risk facing today’s business owner is the possibility of facing expensive and time-consuming legal actions. Australian business owners often find themselves in court as a result of an unforeseen circumstance, which win or lose, can accumulate huge costs for the company. The average cost to a small business of legal action starts at $xxx and can rise to as much as $xxx.
Reduce your risk and chance of being sued with our quick tips:
Hire a Good Lawyer
Have a legal contact to readily call upon. A lawyer can offer consultation on the set up and daily operations of your business. They will advise on best practice to reduce the risk of your business facing legal action, and will know your business and be best positioned to defend you in the event that you are sued.
Find the best fit for your business by interview a number of legal contacts. A suitable lawyer should be familiar with the laws and customs in the area in which the business operates, and expertise in your field would be an additional bonus.
Protect Your Reputation
Be aware of your business image at all times. It’s imperative that owners, managers and employees always conduct themselves in a professional manner, particularly when in the public eye. Ensure that anyone acting on behalf of your business does not make any statements that could be considered defamatory or slanderous.
Take extra care when engaging with third parties:
- Try to avoid any conflicts of interest as this can be damaging to the integrity of your business.
- Don’t conduct business activities that could be considered questionable, including doing business with unscrupulous partners. No matter how ethical your own company is, being linked to an unethical brand is likely to damage your own reputation.
Protect Your Network
Cybercrime is one of the biggest threats to businesses in 2015. Most companies today rely on computers to carry out day-to-day operations, so its imperative your system is safe. Antivirus software, and firewalls should be standard on every business computer.
In addition, your files must be secure to prevent a leak, which can result in of legal action from clients or suppliers. Back up your files to avoid a loss of information, and ensure all stored data complies with legal regulations and is held to the upmost of security standards.
Get Insured
Most companies have third party liability insurance policy which will protect the business against costs incurred as a result of claims made by a third party. Professional indemnity insurance is also important for certain businesses where advice given, if incorrect or incomplete, could result error and in costly legal action. For a more general policy, Legal Expenses Insurance can cover the costly process of defending your company – whether you’re ultimately found to be in the wrong not.
Discuss the legal risks you are exposed to with an experienced PSC Insurance Broker and obtain the right cover so that you can run your business with peace of mind that your company and personal assets are covered.
Bear these practices in mind and act today to reduce risk of your business facing legal action tomorrow.
Conditions apply for each policy and the information expected from you for a policy to trigger. Coverage may differ based on specific clauses in individual policies. Please ask your broker to explain the additional benefits and exclusions pertaining to your policy.
The information provided is general advice only and does not take account of your personal circumstances or needs. Please refer to our financial services guide which contains details of our services and how we are remunerated.
