Employee Lawsuits: When They Can Sue and How to Protect Your Business

Ways to protect your business against employee lawsuits.

Running a business can be fun, challenging, and profitable. However, as a business owner, getting sued is never fun. A lawsuit can be time-consuming, costly, and damaging to your business’s reputation. For most small businesses, a lawsuit is incredibly dangerous to the livelihood of the company. Here’s what you should know about employee lawsuits.

When can an employee sue?

The most common employment claims are wrongful termination, discrimination (age, sex, religion), sexual harassment, retaliation, whistleblowing, overtime, personal injury, and more. It’s important to be aware of the ways in which employees can sue, because all it takes is one bad lawsuit to bring your company down. Although these might seem obvious, the laws are quite nuanced and employers may not realize the smaller details that could help them avoid these lawsuits.

 Can the right insurance save your business?

Insuring your business won’t keep you from getting sued, but it can help separate your personal and business financial strains associated with a lawsuit. The right insurance policy can help you cover legal fees and liability costs. Talk to your insurance agent to determine whether you need general liability insurance, errors, and omissions, employment practices liability insurance, or all three to safeguard your business. Keep in mind that many policies exclude one or more of the above issues such as unlawful acts like pay-check shortage/delays, discrimination, and retaliation.

How your business can avoid lawsuits?

  • Watch what you do and say. Avoid making any statements that someone may take offense to.
  • Have written job descriptions with responsibilities and performance expectations.
  • Encourage employees to communicate any issues in the workplace or their performance.
  • Establish a specific discipline process and high standards, with written records and no exceptions that do not have a clear business reason.
  • Keep clear and safe records of underperformance or bad employee behavior.
  • Maintain a safe and clean working environment.
  • Provide necessary safety equipment that is in good condition.
  • Be ethical, honest, and moral.
  • Provide a clear path of appeal that goes beyond the primary manager, if possible, to allow for unbiased review.

The team at Lou Aggetta Insurance Services can help you to secure reliable commercial insurance to safeguard your business throughout lawsuits. Contact us today in Pleasant Hill, California to get started.