Protecting Your Employees As A Startup Company

Stuart Frost
2 min readFeb 8, 2021


Lawsuits have led to the closure of many small businesses. The business owner must protect the company and its employees against possible cases that may destroy its reputation. Business operations run as anticipated when there are no lawsuits. Lawsuits are always costly to both business owners and employees. Though business people can’t fully guard themselves against lawsuits, taking necessary precautions and steps can help avoid losses from lawsuits.

The following are five ways startups can protect their ventures against legal actions:

Be vigilant on activities and announcements and activities you make
Business leaders should be cautious not to ruin the business’s images through spoken words or questionable dealings. Doing business with companies or individuals known publicly for their unscrupulous dealings may cause the public and the authorities to open lawsuits against the business. Leaders should, therefore, avoid doing business with tainted individuals and companies.

Business owners and employees should not be involved in actions that raise a question on conflict of interests. For instance, they should not involve in passing legislation that will benefit their businesses, even if they will benefit indirectly.

Have a competent attorney on standby
It is advisable to have a layer at standby when starting a business. Counsels from a lawyer are very important before taking action. The attorney should be familiar with the laws in the area where your business is operating. However, in case of a lawsuit, you should hire the services of an attorney who specializes in the area.

Separate your resources from the business
The objective of most lawsuits is the acquisition of the business’ property, cash, and securities. Operating a business in the form of sole proprietorship risks having their personal properties acquired in case of a lawsuit loss. Businesses owners should, therefore, manage their businesses as trust. They may also run the business as incorporation, hence separating the company’s finances from individuals.

Always have the business insured
Insuring the business will help the company to meet lawsuit expenses. For instance, the insurer will come in when a client or employee gets injured on the premises if the company has a liability insurance cover. E&O insurance covers lawsuits against damages caused to clients by the business due to errors and omissions.

Protect all files
As businesses experience digital transformation, they should protect essential files in the computer systems. The company may get sued if it loses or leaks a client’s file. As a precautionary measure, businesses should use antivirus and multi-layer authentication to protect their networks.

The above five strategies will either protect business owners against a lawsuit or place the business in a better position in case of a lawsuit.

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Stuart Frost

Stuart Frost Laguna Niguel, has 30 years’ experience in founding and leading successful data management and analytics startups.