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Friday, November 12, 2021

9 Ways Business Owners Avoid Fines and Lawsuits

The expense of fines and lawsuits is one of the unhappy facts of commercial life. No matter how large or small your organization, there’s always that chance that a customer, fellow merchant, government, or landlord will take legal action against you. Likewise, local and national governments have a habit of imposing fines on companies that break any of hundreds of ordinances and regulations. And, don’t forget industry organizations that also impose their financial wrath on owners and entrepreneurs who run afoul of ethical and other industry standards.

The good news is that there are ways to minimize such problems. Of course, there’s no way to live in a risk-free business environment. Even the most conscientious company leaders run into regulatory and legal trouble every now and then. Frivolous lawsuits are often dismissed in short order, but the defendant still has to hire competent professionals to deal with the challenges. There’s a saying about the best defense being a good offense, and it applies here. The following techniques can help you keep the threat of fines and other financial penalties to a bare minimum, and can reduce the chances your company will have to defend against legal action.

Fleet Management

Electronic logging devices (ELDs) are one of the most reliable solutions to a host of potential violations within the fleet management sector. When you connect your operations to a top-notch ELD compliance program, you can stop worrying about whether drivers exceed their on-road time. Compared to written records, which are no longer a legally accepted form of proof should there be a question about driver hours, ELDs offer clear-cut verification of every vehicle operator’s driving time, down to the exact number of minutes spent behind the wheel on each shift. Business owners who opt for ELD technology quickly come to realize that the better retail offerings are well worth the additional expense in most cases.

Professional Advice

Whether outsourced or in-house, there’s no substitute for competent legal help. The trick for company owners and entrepreneurs is to hire lawyers who specialize in corporate law. That’s because the legal profession is much like the medical field in that you need the right specialist for particular jobs, and practitioners with more years of experience tend to deliver a higher level of service.

Financial Pre-Audits

Corporations of all sizes have begun to learn the value of pre-audits. The process is undertaken by a hired accounting firm for the sole purpose of making sure that an upcoming audit for government authorities will find no ethical or criminal violations. This kind of preventive defense is pure of a financial nature but typically looks at all accounting, financial, reporting, and taxation systems used by a company. In many ways, it’s identical to a government audit, which is the whole point. Most operations managers believe it’s far better to spend a modest amount of money on a pre-audit than to pay hefty fines and penalties to government agencies that find discrepancies in the books.

Safety Czars

In the modern, competitive business world, the best companies appoint safety czars as one-stop managers for all chores that impact the safe operation of the business. In essence, the job included nearly everything a business does, from product design and office arrangement to delivery of goods and installing new flooring or carpets. Safety czars aren’t just window dressing for publicity purposes. In many corporations, they have significant amounts of power, large staff, and healthy budgets. The concept began decades ago but has picked up steam in the 2020s as the number of lawsuits filed against businesses has mushroomed. The job title varies from industry to industry but is usually recognizable by the word safety somewhere in the name.

HR Watchdogs

Discrimination suits against organizations are one of the most common actions in the business world. The HR watchdog, who serves a similar role as safety czars mentioned above, acts as a sort of in-house ombudsman for all issues related to scouting, screening, interviewing, hiring, onboarding, and training of employees. Faced with a lawsuit that claims any type of hiring irregularities, a business’s HR coordinator often works directly with hired law firms to amass documentation that can defeat frivolous claims and negotiate reasonable settlements for others.

Comprehensive Electronic Record Keeping

In a number of industries, it’s legally mandated that owners maintain comprehensive email archives for a certain number of years before the data can be deleted. The same is true for IT logs, meeting notes, and virtually every form of company written communication. Whether required by law or not, wise managers get it all in writing, no matter how insignificant the detail or situation might be.

Preventive Customer Engagement

Rather than sit back and wait for customers to offer negative feedback on online forums, social media, and chat rooms, many organizations work hard to engage recent buyers with questionnaires, feedback emails, and other outreach techniques. This helps you navigate negative reviews and come out on top. By canvassing the people who use your products and services, you can defuse many potential complaints and build goodwill at the same time.

Extensive Product Design and Testing

To prevent product liability (injury) suits, some of the world’s largest manufacturers spend significant amounts of money on product design, research, and testing. There are dozens of industry-specific safety organizations that offer safety-certified labeling that serves as more than a selling point. That’s because going to the trouble of obtaining a green light from a major testing company is often a solid defense against various claims of negligence.


Insurance is not a way to avoid a fine or a lawsuit, but it’s nice to have it should your company come out on the losing end of an action. In most cases, just getting coverage can mean having to show the carrier that your organization follows all industry standards and doesn’t operate in a dangerous or haphazard way. But, just knowing that your insurance premiums could rise if you lose a case can be an added incentive to practice safety in every aspect of company operation.

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Daniyel Carlson
Daniyel Carlson is a Young Researcher in the field of Data Science & Analytics having research experience of more than 8 years. He has a Masters in Computer Engineering and currently serves as an Editorial Assistant in IGI Global, United States of America. Daniyel also holds honorary positions in the Associate Member of Institute of Research Engineers and Doctors, International Association of Computer Science and Information Technology, International Association of Engineers, Society of Digital Information and Wireless Communications.

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