Walmart doesn’t have to worry. Neither does Apple or Amazon. Something happens, they have the resources to refill and replace. But small and medium-sized United States businesses look at a 12 percent chance that at some point in their business career, they will hit an employment claim. In some states, experts with specialty insurer Hiscox have found that statistics to be even higher.

The 2015 study of employee charge trends found California, Washington, D.C., Alabama, Nevada, and New Mexico as the core states struggling with employee lawsuit risk in the nation. The data continued to find that the majority of surveyed employers in these markets with a minimum of 10 employees have a far larger higher risk of being sued by their employees when compared to the national average.

But just because you don’t live in those states doesn’t mean that your business can’t get sued. Sometimes things happen and your business isn’t always going to make everyone happy. That’s why preparation is key.

There’s no way to say when you’re going to get sued. That’s something out of everyone’s control. However when issues begin to transpire, here are the methods to take in order to keep your business from being sued, via Investopedia.

  1. Watch what you say and do, always. Any employees, leaders, executives and especially the CEO should represent the company to the very best of their ability. If they falter in any way, it could turn out bad for business. For example: if you’re a manager, you probably shouldn’t be asking an employee on a date. If they feel uncomfortable enough and have the means, except a lawsuit. In short, don’t do questionable businesses in front of your employees. People could think your practice is shoddy or fake, or think that they can’t work in this environment at all.
  2. Separate Yourself. Sure, The Office might be a crowd favorite. But let’s be honest, the first season describes everything a leader could get a company sued for. And an angry employee will take everything they can. If you don’t separate yourself by personally insuring other assets and separating your finances is also another way to protect yourself and your company in a lawsuit.
  3. Hire a Competent Attorney. Hopefully, they will just be a safety net, but they are helpful. For example, if an employee wants to sue you for a phrase that they found slanderous, having an attorney on deck will help take care of that. Or else you’re going to get served and be left wondering who you can call to solve the problem.
  4. Insure Yourself and Protect Your Files. Not only does your business need extensive commercial insurance, if you’re a CEO you also need to protect your assets. Another thing to do is to protect your business data. Alternative work sites, extensive audits, records, and clouds are helpful. And if there’s a fire or hurricane, that data needs to be completely digital. Since most already are, it’s just a matter of finding the right place to digitally save your business.

About Thayer Innes and Freeman Bunting Insurance Agencies

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