Business Lawsuits and protecting your business under Canadian Law

Unfortunately, lawsuits are a part of doing business. During the life of a company, they will most likely be sued for something. To limit exposure, a business should take proactive measures to quell the chance of litigation. One of the most harped upon tactics for limiting liability is to incorporate. This helps ensure that when a business is sued for whatever reason that the owner's personal assets are less likely to be at stake. Incorporating is not cheap and is not for everyone, but can ultimately be worth it in the end. Getting coverage. Insurance is another thing to consider. A solid policy is a necessary expense that will pay off down the road should you end up in court. Defense coverage can cover a part of or all legal expenses and settlements and is well worth the investment. It's prudent to discuss different plans available with an agent. Find out what the deductable is, what the coverage entails and so on. Is your merchandise dangerous? Take precautions with potentially hazardous merchandise. Encasing items that could inadvertently harm incautious patrons is a good idea. Require store personnel to assist customers with certain items. Training for employees is essential. Some businesses rely on videos demonstrating the correct course of action or qualities they expect from their employees should a situation arise. Meetings to discuss issues like sexual harassment or general procedures help stave off potential lawsuits as well. Communication is key. The more detailed a picture a business owner can paint of what's expected for her staff the better. Retain a lawyer. Although there is no need for one right now, there will be. Having legal representation there for counsel shields business owners from others as well as themselves. In the book, Protecting Yourself from Business Lawsuits, Schweich states problems arise when a business owner preemptively sues someone in haste. "More often than not, the defendant becomes so infuriated at having been sued that it immediately escalates the matter… respond[ing] to the suit with a volley of costly and disruptive actions such as multiple pretrial motions, onerous requests for documents, lengthy interrogatories, and notices of deposition reaching all the way up to your CEO." Taking a moment to discuss matters with an lawyer can help owners avoid such a legal morass. There is no magic formula for 100% protection against lawsuits. Just last year, a securities broker sued a New York strip club, because he sustained "serious injuries" during a lap dance. Maybe he did and maybe he didn't, but ultimately the owner of Hot Lap Dance Club ended up being sued. Illustrating again how no one is immune from litigation- not even strip clubs.