One of the greatest threats that businesses of all sizes face today is from within, as disputes and lawsuits brought by employees have become more frequent in the last decade. Many of these issues result from claims of unlawful termination, work harassment, discrimination, denial of promotion and other career opportunities, and more.
Perhaps most ominously, costly lawsuits can arise even if the employer has done nothing wrong. While a lawsuit itself is no proof of wrongdoing, defending yourself against unfounded charges can still be expensive. As a result, small businesses are especially vulnerable to the potentially devastating effects of a lawsuit.
While an employee practices liability insurance policy can offer protection to small business owners against the cost of a lawsuit, too many claims against a company can raise premiums and compromise its credibility. As a result, it’s advisable to put internal practices in place to reduce the likelihood of running into legal problems.
For instance, vigilant monitoring of employees can yield evidence that can help justify termination of a worker for unlawful conduct or violations of company policy. Enough evidence can discourage an employee from filing a lawsuit.
In addition to monitoring individual employees, an overall policy of effective risk management should be in place throughout the organization. By keeping its staff updates with all health and well-being requirements and compliance training. A clear understanding of what it means to be in compliance with the organization’s expectations, rules and regulations makes it less likely for an employee to eventually be fired for non-compliance.
Compliance training can also offer employees the skills and knowledge they need to deal with difficult situations that can arise both internally and externally.
A crucial part of managing risk is to identify where it’s located within an organization. Every small business needs to know where its most valuable assets are, who is managing them and where its vulnerabilities are. Such self-awareness and record-keeping will make the business better prepared to avoid work-related injuries, and to fend off potential lawsuits when injuries do occur.
Through a sound strategy of employee risk management, a company of any size can investigate potential claims in advance and address them before they lawsuits arise.