Results-Focused Legal Advocacy For Clients Throughout Greater Seattle

What do small business owners need to know about getting sued?

On Behalf of | Aug 23, 2022 | BUSINESS & COMMERCIAL LAW - Business Litigation |

If you own a small business in Seattle, you are likely more concerned about your daily expenses than a potential lawsuit. But approximately 12 million lawsuits are filed against small businesses every year. As a small business owner, consider these facts in order to protect yourself.

Small businesses face claims and lawsuits

Business litigation involves both lawsuits and claims. Although they can both be financially difficult for your company, they involve very different processes. A claim asserts a legal demand for compensation. Insurance claims provide the best example, but small businesses can receive a claim, too.

Lawsuits differ from claims because they are legal actions that involve all of the following:

  • Plaintiffs
  • Defendants
  • Filed court motion
  • Requested amount of compensation
  • A judge

Separating yourself from your business protects your personal finances

When you decide to start a business, you may follow the path of many first-time business owners and start a sole proprietorship. But this method of business ownership can be devastating in a business lawsuit because the court can go after your personal assets as well as your business ones. Both trusts and incorporating your business help to guard your personal assets in case your company loses a lawsuit.

Keep accurate records to protect your company against potential lawsuits

Cautious business owners always put their agreements in writing. Having signed agreements and accord record keeping can demonstrate to a court that you are keeping up your end of the business deal.

Lawsuits do not need to end your small business dream

Although facing litigation for your small business can be stressful, it doesn’t have to mean the end of your company. With the proper preparation and understanding of the process, your company can survive the lawsuit and continue to thrive.