Key Tips On How To Prevent Business Litigation

Disclaimer: This article should not be treated as legal advice. It’s recommended that readers still consult legal counsel and contact a lawyer should they have any concerns on business litigation.

Life is always full of surprises, but that doesn’t mean we can’t plan for appropriate responses to things that happen in life. The same goes with our businesses, and it’s important to have a plan in place for numerous circumstances so we can always be on our guard should something happen. For instance, you can actually save a lot of time and resources if you have a good protocol in place when it comes to preventing business litigation.

The legalities of business litigation can be a bit complex, especially if you’re dealing with your business in itself. Not all businesses are the same, and therefore protocols towards business litigation aren’t the same as well. However, there are key tips on how to prevent business litigation that you could follow, which, when modified to your needs, can greatly help you and your business.

If you want to try some of the key tips below, it’s advised you consult a legal professional first to get their opinion in the efficiency and effectiveness of these methods when applied to your business scheme.

Review All Your Contracts Carefully

When we talk of business contracts, we’re always reminded to review the terms and conditions in these contracts carefully. If we want to avoid business litigation, we should take this step further and ensure all parts of the contract are understood before ever signing one.

  • This applies to all the contracts you have in the company, be it contracts with service providers, with employees, and even your partners. Knowing your contracts inside and out can allow you to have a good understanding of their various implications to your business, should the need to assess them arrives.
  • Remember that hiring legal counsel to review these contracts isn’t such a bad investment. This is a good use of legal fees as the lawyers you may hire will be able to help you assess these contracts and pinpoint things you may have to adjust, or you may potentially have issues with.
  • In the same token, make sure you only sign contracts that are solid and clear. You’re free to clarify everything that can be potentially confusing, as these contracts are binding and legal agreements that can put you in unnecessary risks when misunderstood.

Be Careful With Insurance

When we talk of insurance, we tend to think that all sorts of insurance can benefit our business. This philosophy is partly true, but we need to approach the topic of insurance with a degree of care and sophistication. Try to make sure you insure parts of your company or business that will surely benefit from these insurance policies.

  • Assess the kind of insurance policies you’ve signed the company up for, and try to see if they’re really useful to you. If they are, make sure you carefully audit these policies, and you understand what they cover and how they can protect your business.
  • In the same token, if you’re looking into registering your business with other insurance policies, assess the kinds of benefits they have, and the risks they can protect you from. Investing in these policies can help prevent business litigation, but only if you invest smartly.
  • Perhaps some good advice is to consult with a lawyer on the kinds and types of insurance your company should have as well. Their insight could help you assess the insurance you need to provide your business with, so if a lawsuit happens, you don’t necessarily have to take care of the bill alone.

Records Can Keep You Safe

In addition to carefully examining contracts, try to make sure you have good record-keeping policies as well. Review your current document retention policies and see if they are useful for your company. How are you storing your data and how well are these documents kept? Understanding how these current policies work and adjusting them to make sure you keep relevant documents stored properly can keep you safe from litigation.

  • This is because important contracts, documents, and correspondences can greatly benefit you, your employees, your clients, and your partners should you need to refer to something important in a specific document. This can greatly speed up talks and clarify disputes.

Training, Discussions Matter

In the same token, aside from making sure your paper trail and your contracts are properly managed, be sure to be nurturing your relationships with your staff and clients as well. You should hire, train, and manage staff with processes and protocols that could help avoid the risk of lawsuits.

  • For instance, make sure your staff are properly trained with guidelines on how to act inside and outside the company. These include the kind of information they can share with colleagues that aren’t working in the same company. At the same time, these policies could also help protect them against harming themselves and the company in a legal manner.
  • Your managers, too, should be trained in how to settle disputes without them escalating into extremely serious matters. Training starts from the inside: if your staff knows how to follow specific protocol, then you can have an extra degree of certainty that your affairs will be in order.

According to Small Business Times, the tips mentioned above might seem to be small steps, but they can be extremely helpful especially if you find yourself in potentially tricky situations. Keeping your head cool and thinking about business litigation the way you think of your business plans can be that extra guarantee you need into ensuring you can navigate your way through business litigation without harming your business.


They say prevention is better than cure, and it applies to business litigation as well. Knowing which of they key tips to follow on how to prevent business litigation can be an extremely smart move, especially if we remember how costly business litigation can become for both parties. The stress and resources we have to allot to solve these disputes can be costs we can’t retrieve, which makes it much smarter to find ways to prevent business litigation in order to satisfy all parties that deal with us internally and externally.

Of course, knowing how to deal with business litigation is a good thing as well. Your legal counsel can give you guidelines on how to approach business litigation should it happen to your company. However, in today’s vastly growing and expanding market, it’s perhaps wiser to be able to find ways to prevent emergencies like business litigation in order to ensure we maintain a smooth and productive work environment for the entire business.

Author Bio : Cindy Dowling, part time writer who offers a fresh take on various law topics with the pieces she writes for local firms. Cindy enjoys a good cup of coffee and a good book whenever she has the time.