Small business owners tend to be as invested emotionally with their companies as they are financially. Research from the Small Business Administration (SBA) shows that operators of small companies face both emotional and financial hardship in the wake of litigation that can alter the trajectory of the business. Avoiding the most common types of litigation can save you both mentally and financially.
If you’re interested in being proactive about avoiding litigation, a professional employer organization (PEO) may be able to help. PEOs provide human resource and accounting solutions for small- and medium-sized businesses. Call (678) 376-1212 to speak with one of our representatives to learn how a PEO can help protect your business while saving you time and money.
Common Types of Litigation Small Companies Face
As the owner of a small company, you need to be prepared to face potential lawsuits. It is an unfortunate possibility which many small businesses don’t adequately prepare themselves to handle. The cost of these lawsuits can range from several thousand to more than $100,000.
Claims made by employees represent one of the most common types of litigations small companies face. These lawsuits may arise from claims with the Equal Employment Opportunity Commission (EEOC), civil lawsuits, or from workers’ compensation claims. The specific types of claims employees are eligible to make vary based on federal, state, and local laws.
Is your company ready to spend 275 days and $125,000 in legal costs? Those are averages for employee discrimination lawsuits, according to research compiled by Hiscox. Depending on insurance costs and whether the plaintiff is willing to settle, the legal costs could range from $30,000 to more than $200,000.
Contract Breach Litigation
Your company may be liable to pay substantial sums if you’re found to have breached a contract. This may arise if you’re unable to pay a supplier, fail to provide a good or service at an agreed upon time, or give a customer the wrong good or service. Contract breach lawsuits can come from a variety of sources, including customers, employees, and other businesses you work with.
Intellectual Property Litigation
Copyright law, along with other intellectual property right violations, is a massive source of potential litigation for small companies. Designs for websites, company logos, and written works used without proper permission can be subject to stiff penalties for offending businesses. Even unintentional lifting of an intellectual property can lead to liability for small companies.
Many small companies face lawsuits from customers. Beyond breach of contract litigation described above, customers may be able to initiate lawsuits for discrimination, personal injury, or even failure to properly secure the premises of your business.
Protecting Your Business from Litigation
While lawsuits are always a possibility, you can help protect your small company by being proactive. Familiarizing yourself with local laws regulating your business is a good first step. Making sure you have the proper insurance for your business and speaking with a lawyer may also be beneficial.
Being vigilant about new regulations on top of enforcing existing ones can be troublesome for many small business owners, particularly when it comes to HR and accounting practices. One solution for these concerns is to turn to a PEO for your HR and accounting needs.
When you sign a co-employment agreement with a PEO, you get access to trained HR and accounting professionals who will help protect you from potential litigation. Your PEO partner will help make sure that your business operates within the appropriate state and federal regulations and will be responsible for making sure you’re compliant with changes to the law.
NetPEO Will Help You Find a PEO
If you’re interested in finding a PEO partner that will help protect you from litigation and can help streamline much of the paperwork for your business, NetPEO is here to help. Our PEO brokers are trained to listen to your business needs and find a perfect PEO partner with the necessary experience and services. We recommend only PEOs from our highly trusted partner network, which is why we’ve maintained an industry-leading 100% customer satisfaction rating.
When you’re ready to take the first steps towards protecting your small company from litigation, while also streamlining your business operation, call (678) 376-1212 for your free initial needs analysis!