How Small Businesses Can Protect Their Small Businesses from Lawsuits

57% of lawsuits effect companies making less than $1 million in revenue. 1 in 3 small business owners are sued or threatened with a law suit. Bolt Insurance developed an infographic for entrepreneurs and business owners to learn more about the most common lawsuits that small businesses face, how much it may cost them, and how they can protect themeselves.


  • $100 billion: How much small businesses spend on legal action in the U.S. annually
  • 25%: Number of harassment claims has risen since 2006
  • $404 Million: Price to settle discrimination related law suits each year
  • 104 Billion: Annual cost to settle tort liability


  1. NEVER BE SURPRISED Acknowledge the possibility of a lawsuit and takes steps to prevent it.  Work to identify the areas of your business that are vulnerable as most lawsuits are preventable with an honest assessment of your business.
  2. GET EVERYTHING IN WRITING: You can’t close a deal on a handshake, it must be done in writing – painstaking as it may be.  Details, such as deadlines and costs, can be fudged later if it is not in writing.
  3. INVESTIGATE AND DOCUMENT IT: When a client or employee has a complaint do something about it! Investigate and document the investigation.  Consult with an attorney to discuss your findings and weigh the potential for settlement in a tricky situation.
  4. INVEST NOW RATHER THAN PAYING LATER: The cost of legal support is not cheap, but it is better than a multi-million dollar settlement later
  5. BUY INSURANCELiability claims costs companies billions every year; liability insurance can lessen or eliminate the potential for a massive claim against your small business.
See also  What Are The Benefits Of Sending Newsletters To Clients?

Via: BOLT Insurance


CBNation helps entrepreneurs and business owners succeed with visibility, resources and connections. CEO Blog Nation is a community of blogs for entrepreneurs and business owners. Started in much the same way as most small businesses, CEO Blog Nation captures the essence of entrepreneurship by allowing entrepreneurs and business owners to have a voice. CEO Blog Nation provides news, information, events and even startup business tips for entrepreneurs, startups and business owners to succeed.

Related Articles


  1. Great article! I completely with your point of view. A lawsuit affects the bottom line as well as the morale of the business. Business owners also waste a lot of time worrying over the lawsuits which leads to sleepless nights, lost productivity and in some cases health issues. Preventing a lawsuit is a great investment in time and money and less costly overall.

    -Michelle Mendoza, SPHR
    Connect to HR, LLC

  2. Fantastic information here! Business insurance and legal advice are never overrated. Those two things can protect you and your business provided you have them in place BEFORE you find yourself in the middle of a situation.

  3. Lawsuit can be very dangerous for your small business and if you lose your cases in court that means your business will not run anymore. A good solicitor can be hired for these situations who can guide your through your actions and suggest you to implement in a way which is legal and profitable.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Back to top button