The threat of lawsuits must be in the back of every business owner's mind at all times. Small businesses are met with lawsuits by the thousands every year. A business owner can get sued for many reasons, from disputes over service and goods contracts to employee related issues such as workplace injury.

Many lawsuits are avoidable and the best protection against damaging lawsuits is prevention. However, when armed with the proper lawsuits information, knowing how to handle a lawsuit when it arises can mean the difference between helping your business escape legal proceedings unscathed or watching your business go under amid mounting legal bills. In order to help prevent and properly deal with lawsuits against your business, keep the following in mind:

1. Take immediate action if a lawsuit is filed against your business.

2. Take all lawsuits seriously, no matter how frivolous they may seem.

3. Keep emotions out of all legal proceedings and let the lawyers handle everything to avoid making the situation worse.

Action Steps
The best contacts and resources to help you get it done

Avoid lawsuits by understanding business laws and regulations

There are laws and regulations that need you need to comply with on the federal, state and local levels in order to avoid lawsuits. It is essential that you and your employees are aware of these laws and regulations.

I recommend: Find free information on laws and regulations specific to each state online at LegalLawHelp.com, or get free legal advice at Free Advice.

Conduct lawsuit background checks

Include a lawsuit and civil action screening during background checks of potential employees and business partners. An employee with a past of legal troubles could spell instability for your work environment. A company with a history of legal problems could not only put your business at risk, but discourage investors as well.

I recommend: Check for a history of lawsuits using a screening company such as Inquest Pre-Employee Screening, which offers online registration and a free price quote. Register online for Gov-Resources.com, which offers one-year or five-year unlimited access to a business or individual's legal records for a low price.

Hire a lawsuit lawyer immediately if a lawsuit arises

In the event of a lawsuit don't try to settle anything on your own, it will only end in disaster. Consult a lawyer right away, before speaking to anyone else about the situation, including business associates, investors or employees. Hire a lawsuit attorney that specializes in business law and has experience in successfully settling business legal matters.

I recommend: Find business lawyers at the Lawyers.com or FindLaw.com.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Another way to help prevent lawsuits is to hire a lawyer to draft all of your business's contracts and agreements.