Owning a small business has many perks like setting your own hours, specializing in your favorite niche and choosing to work alone or with a few other people. Alas, business ownership has its downsides, its biggest one being a vulnerability to lawsuits.
Every year, 36 to 53 percent of small businesses deal with litigation, and 43 percent are threatened with lawsuits. Here are four types of lawsuits small businesses typically face.
Product Liability
Product liability lawsuits involve an object that doesn’t work like it’s supposed to or breaks down. For example, someone orders a fan that explodes after they plug it in. A customer can also pursue litigation related to a food product, such as finding something hazardous in their sandwich.
Workplace Injuries
Workers can get hurt anywhere, even in a low-key office setting. Though there are extreme injuries like slips and falls, even something as “mild” as back pain might drive employees to sue their bosses.
Customer Discrimination
Most customers are familiar with signs that say, “No shirt, no shoes, no service.” However, the Civil Rights Act of 1964 prohibits public and private businesses from discriminating against customers based on sex, race, age and other characteristics.
A customer who is overlooked in a restaurant or lacks special accommodations for a disability might believe they’re a victim of discrimination and sue the business.
Wage Law Violation
Suppose an employee receives less pay than another employee doing the same job. Their boss tells them it’s a mistake, but the employee feels underpaid on purpose and threatens to take the issue to court.
Facing a lawsuit — whether based on facts or a misunderstanding — is difficult for a small business owner to handle. If a customer or employee is suing you, please seek experienced legal guidance for assistance.