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One of the most significant risks your Manhattan company can face is becoming a party to a lawsuit. Businesses can face various legal claims, such as contract claims, tort and personal injury claims, employment and labor law claims, and consumer protection claims. Litigation can also arise due to a company’s violation of regulatory requirements. A lawsuit can have devastating consequences for a company, including financial liability or damage to public reputation. 

Proactive Planning for Your Business

Business leaders have some practical ways to protect their companies from the financial expenses and time requirements of litigation and the potential legal consequences of losing litigation. Perhaps the most effective approach is to prioritize proactive planning, including detailed contract drafting, securing insurance coverage, conducting legal audits to ensure regulatory compliance, and pursuing alternative dispute resolution to handle legal matters before they become lawsuits. 

Careful Contract Drafting

Contractual disputes frequently lead to litigation for businesses. As a result, one of the most critical ways to protect your Manhattan business from lawsuits includes careful contract drafting and negotiation. A well-drafted contract can minimize the risk of disputes between your business and counterparties. Spelling out each party’s contractual rights and obligations can avoid misunderstandings or ambiguities that may arise during the contractual relationship. Contracts can also include dispute resolution clauses that allow parties to avoid court litigation and handle their disputes through mediation or arbitration. 

Solid Employment Practices

Many legal problems faced by businesses arise from workers’ claims and disputes. Businesses can avoid employment and labor lawsuits by developing clear, detailed employee policies and handbooks to reduce misunderstandings or ambiguities, such as disputes over disciplinary procedures or grounds for termination of employment.

Your business can also work with experienced legal counsel to ensure its compliance with federal, state, and local labor and employment laws, such as wage-and-hour laws, worker discrimination and harassment statutes, and workplace safety rules. A company’s employment practices should also include careful documentation of employee performance, including regular performance reviews or disciplinary proceedings.

Maintain Insurance Coverage

Purchasing liability insurance coverage can provide companies with significant financial security from lawsuits. Depending on a company’s business operations, it may purchase insurance policies such as directors’ and officers’ insurance, errors and omissions insurance, professional malpractice insurance, commercial property insurance, commercial auto liability insurance, general and umbrella liability insurance, and workers’ compensation insurance. 

Companies should regularly review their insurance policies to ensure their coverage meets their business’s current operational needs, including covering new lines of business or insuring the full value of the company’s property. Your business’s legal counsel and insurance brokers can help you review your company’s insurance needs and update coverage as necessary. 

Keep Up with Regulatory Requirements

Companies can work with their legal counsel to stay up-to-date with state and local regulations, including licensing and permits. Legal auditing can help businesses avoid areas of non-compliance so the company can resolve the issue before it triggers potentially costly regulatory enforcement litigation. 

Utilize Alternative Dispute Resolution Practices

Finally, having alternative dispute resolution agreements in all your company’s dealings can protect the business’s legal options, interests, and reputation. Alternative dispute resolution procedures like arbitration and mediation allow companies to resolve legal disputes efficiently and privately. Mediation or arbitration can obtain a settlement or legal decision faster than traditional court litigation. Arbitration and mediation also allow companies to keep their legal disputes out of the public record, which can help businesses avoid negative public relations or loss of goodwill with customers, suppliers, or other partners. ADR methods like mediation can also help resolve legal disputes before they escalate into costly litigation. 

Contact a Business Attorney Today to Get Help Protecting Your Company

When you need experienced guidance and support to protect your Manhattan business from the consequences of a lawsuit, turn to the experienced team at Levy Goldenberg LLP. Contact us today for an initial consultation with a knowledgeable business attorney to discuss your company’s rights and options.