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What legal steps should I take to protect my small business from liability claims in Texas?

Picture of Chris Battis By   ·  1 minute read

To protect your small business from liability claims in Texas, there are several legal steps that you can take.

  1. Incorporate your business: By incorporating your business as a limited liability company (LLC) or a corporation, you can limit your personal liability for business debts and legal claims. This means that if your business is sued or can’t pay its debts, your personal assets (such as your home or car) won’t be at risk. However, it is important to note that corporate formalities must be followed in order to maintain the liability protection afforded to the owners of the business.
  2. Purchase business insurance: Obtain general liability insurance to cover any accidents that may occur on your business premises or during business operations. Workers' compensation insurance is also required in Texas if you have employees. Other types of insurance that may be beneficial for your business could include professional liability insurance or errors and omissions insurance.
  3. Create and follow proper policies and procedures: Establishing and following proper policies and procedures for your business can help reduce the likelihood of liability claims. Have a clear employee handbook that outlines expectations and procedures for handling workplace issues. Ensure your business complies with all federal and state laws and regulations.
  4. Keep accurate and complete records: Ensure that all financial and business transactions are properly documented, including contracts, purchase orders, and invoices. Keep track of all employee records such as attendance, performance evaluations, and training.
  5. Seek legal advice: Consult with an experienced business attorney who can advise you on the unique needs of your small business. A lawyer can help you properly incorporate your business, develop policies and procedures, review contracts, and provide advice on legal compliance.

It is important to note that even with these steps, there is always the risk of liability claims against your small business. If a lawsuit is brought against your business, ensure that you immediately seek legal advice to properly handle the situation.