Protecting Your Business from Liability in Texas

 Posted on April 23, 2024 in Business Law

A successful business requires more than a great product or service and a strong work ethic. It also demands a proactive approach to managing risk and protecting the company from potential liabilities. Businesses face various legal threats that can arise from everyday operations, from customer disputes to employee injuries. A Texas lawyer can help you with the best ways to protect your business.

Choose the Right Business Structure

One of the first decisions you will make when starting a business is selecting the appropriate legal structure. In Texas, you can choose from several options: sole proprietorship, partnership, limited liability company (LLC), and corporation. Each structure offers varying levels of personal liability protection.

For maximum protection, consider forming an LLC or corporation. These structures create a separate legal entity, which can help protect your personal assets in case of a lawsuit or business debt.

Maintain Adequate Insurance Coverage

Insurance is a crucial component of any liability protection plan. Businesses must carry certain types of insurance, such as workers’ compensation (if you have employees) and commercial auto insurance (if you use vehicles for business purposes).

Beyond the mandatory coverage, consider obtaining general liability insurance, professional liability insurance (if you provide professional services), and product liability insurance (if you manufacture or sell products). These policies can help cover the costs of legal defense and settlements in the event of a claim against your business.

Implement Strong Contracts and Agreements

Carefully drafted contracts and agreements can help minimize the risk of disputes and protect your business from liability. When working with clients, vendors, or partners, ensure that your contracts clearly outline the scope of work, payment terms, deadlines, and other relevant details.

Include provisions such as limitation of liability clauses, indemnification clauses, and dispute resolution procedures. Review your contracts to ensure they comply with state laws and adequately protect your company.

Maintain Accurate Records and Documentation

Keeping detailed and accurate records is essential for protecting your business from liability. This includes financial records, employee files, client communications, and other relevant documentation.

In case of a lawsuit or legal dispute, having well-organized records can help demonstrate your company’s compliance with laws and contracts. It can also help you mount a strong defense and avoid costly penalties.

Prioritize Workplace Safety

Accidents and injuries in the workplace can lead to significant liability for your business. To minimize this risk, prioritize workplace safety and comply with all relevant Texas and federal regulations, such as the Occupational Safety and Health Act (OSHA).

Develop a comprehensive safety program, provide regular employee training, and promptly address hazards or concerns. By fostering a safety culture, you can reduce the likelihood of accidents and protect your business from potential lawsuits.

Address Complaints and Disputes Promptly

If a customer, client, or employee raises a complaint or dispute, address the issue promptly and professionally. Ignoring or mishandling complaints can escalate the situation and increase the risk of legal action.

Establish clear procedures for handling complaints and train your employees on these protocols. If a dispute cannot be resolved internally, consider alternative dispute resolution methods, such as mediation or arbitration, before resorting to litigation.

Contact a San Antonio, TX Small Business Lawyer

Business liability can be challenging, but you do not have to solve any problems on your own. Working with a Bexar County, TX small business attorney can provide invaluable guidance and support in protecting your company from potential liabilities. Call Geoff Mayfield, Attorney at Law at 210-535-0870 for a free consultation with a lawyer who works with you like you are on the same team and truly cares.