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Ensuring that you are ready for legal trouble

If you are in the process of starting a small or midsize business, you have a lot of planning to do. Since your business will have a limited number of employees, you probably won't have a human resources department or a legal team on the payroll. Much of that work will likely fall to you.

Your duties in that area will likely not only include proactivity to avoid legal risks to your Minnesota company but dealing with those issues when they do arise. However, in order to know how best to protect or defend yourself -- for example, purchasing insurance or consulting with an attorney -- you may wish to know the most common lawsuits that businesses of all kinds face.

What are the risks you can prepare for?

Lawsuits consume time and energy, not to mention money. They can drain your company of its morale and damage productivity. Nevertheless, you can't ignore it when someone files a complaint against you. You can, however, know the risks you face and work to avoid those problems, including the following:

  • Employees may feel you discriminate against them because of their race, sex, religion or other protected class if they perceive that you treat them differently or deny them benefits that others receive.
  • Employees may accuse you of harassment, sexual or otherwise, that creates a hostile work environment if you behave or allow other employees to behave inappropriately toward a co-worker.
  • Employees may believe you have retaliated against them if you demote, fire or otherwise punish them after they file a complaint against you.
  • Customers or clients may believe you have treated them unfairly by refusing them service or neglecting to make reasonable accommodations because of their protected status or because of a disability
  • State or federal agencies may act upon complaints that you pay unfair wages, withhold overtime pay or otherwise deny your employees the compensation they deserve under the law.
  • A client, customer, partner or other business associate may breach a contract with your company or accuse you of doing so.

Of course, there could also be risks that you will face a tort. This is a legal action that results when someone suffers because of a business owner's alleged negligence. For example, a customer who is injured after he or she trips or falls in your store or office and claims the accidents occurred because you failed to deal with a hazard may file a tort against you.

If you purchase insurance to help you cover lawsuits and costs for any of these possibilities, you may expect the insurance company to back you up when a claim comes up. If this isn't happening, the assistance of an attorney with experience in this area of law can be an invaluable asset.

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