Five Tips For Small Business Owners:
How To Keep Your Company Out Of Court

A recent article by Investopedia.com, a firm specializing in crisis management strategies for business owners, took a closer look at what steps small business owners should take to keep their companies out of court. Below are the firm’s top five tips to help safeguard small business owners from lawsuits and other business breakdowns.

1.) Watch What You Say & Do: Owners and their employees should avoid making any public announcements or conducting any business that might be considered questionable. This means avoiding things like libelous or potentially slanderous statements, but it also means not doing business with unscrupulous individuals.

This point also includes limiting any possible conflicts of interest. Business owners and their employees must avoid situations where a conflict of interest may present itself.

2.) Hire A Competent Attorney: Owners should attempt to secure an attorney that is familiar with local laws and customs in the area in which the business operates.

As a member of this Association, you are entitled to free legal advice (30 minutes free, per issue). Joe Schmitt of Nilan, Johnson, Lewis, in Minneapolis, MN, specializes in helping members with all their human resource concerns. Schmitt can be reached at (612) 305-7500 or by email at jschmitt@nilanjohnson.com. Schmitt will also be speaking at the upcoming Tampa Spring Management Clinic, where he will address recent NLRB decisions and the effects those decisions will have in the workplace.

Brian McGrath, with Foley & Lardner, in Milwaukee, WI, specializes in product liability issues and buy back concerns, along with a variety of other issues. McGrath can be reached at (414) 297-5508 or by email at bmcgrath@foley.com. Both of these experienced lawyers have been helping members for years.

3.) Separate Yourself From Your Business: Many business owners own and operate their companies as sole proprietorships. The only problem with this is that in the event the company is sued, the owner’s individual assets (such as their cars or home) are fairly easy to attack or attach in a court of law.

The solution to this, or at least a way to limit the possibility that the owner’s personal assets might be the target of a suit, is to have a trust own the business. A trust is a legal entity that, in most cases, files its own tax return and can own property, businesses, cash, securities and a host of other assets.

4.) Insure Yourself: All businesses should obtain liability insurance. In addition to purchasing insurance, another way to insure yourself against liability is to build protection into your contracts. If an act of nature, a specific supplier or some other uncontrollable act can make it impossible to fulfill a contract, then it should be put in ink that the company is not liable for incomplete work due to these factors.

Association members can rely on Sentry Insurance to help with workers compensation, product liability insurance and property-casualty insurance needs. Bob Bonifas, with Sentry Insurance, can help you with your insurance questions and can be reached at (715) 346-6985 or by email at bob.bonfias@sentry.com.

5.) Protect Your Files: Businesses should have updated antivirus and other types of security software loaded and activated on their computer systems and networks. If a computer system were to go down because of a virus or a technological breakdown, companies should have a set backup plan and policy to refer to, even if it means taking on the arduous task of monthly, weekly or even daily back up plans/schedules. It is also highly recommended that companies keep an off-site back up of their computer systems.

Take advantage of all the great membership benefits your Association offers. For more information on all of the Endorsed Services or other membership benefits, contact the Association’s office today or go to FarmEquip.org/Endorsed_Services. ◆