Shielding your business

Legal And Insurance Considerations To Keep In Mind

By Shylah Maloney Barton Gilman LLP

Running a business presents numerous challenges, including managing risks and liabilities. While these looming exposures may cause added stress, having a plan and a reliable team on your side can help you remain proactive and informed. Maintaining appropriate insurance coverage is one piece for protecting your business and minimizing potential financial losses. Additionally, establishing and implementing proper policies and procedures can allow businesses to minimize risk. It’s important to understand important legal and insurance considerations for local businesses on the North Shore.

Below, we will explore common risks, exposures, and liabilities that businesses face, and best practices businesses owners should consider implementing.

Employment

This is one of the leading areas for lawsuits against businesses, especially small businesses. This liability includes issues with wage and hour, overtime, categorizing employees, wrongful termination, discrimination, and harassment, among other employment-related issues. The potential exposure for employment liability is not only with your current employees, but also with potential employees and prior employees.

These types of matters are costly and typically require filings with the Massachusetts Commission Against Discrimination. Now more than ever, employees are aware of their rights and are vocal about them. Always maintain proper hiring, training, reviewing, and work culture standards to remain competitive and in line with current Massachusetts laws. Reduce these types of risks by creating and enforcing clear employment/hiring policies, providing proper training, and promoting a respectful work environment.

Cyber Security

Being held ransom for your business’s data could be catastrophic. In today’s digital age, businesses face increasing risks from cyber-attacks, data breaches, and privacy violations. Consider reviewing your current cyber security policies, now and periodically, to keep ahead of this risk. These types of breaches can range from phishing links to replicating an email. Threats are getting more advanced with AI technology, and could now even imitate a person’s voice. In that instance, employees would be less suspicious an are more likely to provide the elicited information or follow a request.

Implement strong cybersecurity measures to reduce the likelihood of an attack and safeguard your business’s data and your customers’ personal information. This includes ongoing training for every employee. Moreover, a business may consider obtaining cyber liability insurance to protect against financial losses, legal expenses, and reputational damage resulting from such incidents if their coverage does not include this already.

WORKERS’ COMPENSATION

These types of cases arise from an employee’s workrelated injuries. Massachusetts law requires most employers to carry workers’ compensation insurance. It provides medical benefits and wage replacement to employees who are injured or become ill on the job. Workers’ compensation claims are quite common, but the increase in remote work positions has created additional exposures to employee injuries. It is difficult, if not impossible, for businesses to avoid risks present at each employee’s home. For example, in a claim brought by an employee who alleges to have been injured while working at home, it is important to determine whether the employee was furthering your business during the activity that resulted in injury. Be mindful of employees’ employment duties and assignments, and be specific and detailed whenever possible, especially with employees that work from home.

Product Liability

If your business manufactures or distributes products, you may be held liable for harm or injury caused by defective or unsafe products. Implement strict quality control measures and product testing to minimize the risk of product-related incidents. Industry experts can also be a great resource in assisting companies with proactive measures to ensure the continued distribution of safe products to the community. Regularly review pertinent regulations and update internal policies to meet these changes to minimize product liability claims.

As a business owner on the North Shore, it is crucial to understand and address the various risks, exposures, and liabilities your business may face. By implementing pertinent policies, carefully evaluating insurance coverage, and considering the common risks specific to your industry, you can protect your business and ensure its long-term success. Collaborate with experienced professionals in various areas to remain innovative and forward-thinking.

Considerations

Risk Assessment: Conduct a thorough risk assessment to identify potential hazards and vulnerabilities in your business operations. Evaluate your property, equipment, products, services, and employee activities to understand the areas that may lead to liability exposure. For instance, if you operate a restaurant, consider the risks associated with kitchen fires, slips and falls, and foodborne illnesses. These reviews should not be a one-time action and should be performed periodically to maintain vigilance. Regularly review your insurance policies to ensure that they adequately cover your business risks. Understand the scope of coverage, policy limits, deductibles, and exclusions.

Communications with Legal Counsel: While keeping an attorney on retainer may not work for every business, maintaining a relationship with a reputable attorney before something occurs can allow for a more concise and seamless process. An attorney is not simply someone who is brought in when a business is sued, they can be a major ally in setting up internal processes and assisting