5 small business legal clangers to avoid
Small mistakes can be opportunities to learn, but bigger errors that have legal consequences attached will often only be made once, as they’re enough to bring your business crashing down.
We look at five such blunders and explain how these can be avoided:
Unguarded information
Sensitive information such as that which is financial or can identify one of your customers or clients needs to be treated to the best security processes you can muster. If an employee with an axe to grind or a hacker gets hold of this information, it could be your company’s neck on the block. If your competitors get hold of key information, or one of your customers makes a claim, the costs could be far greater than the time and money spent on adequate security, whether this is software-specific or relates to information access policies.
Muddled wages
Frequent legislation updates and dense balance sheets can be cause for one of the most frequent legal gaffes for small business owners: wage errors. Mistakes may include illegal deductions or mis-calculated or even non-existent overtime, and while these might be small for the company they could have a big impact on the employees in question, especially if they have scheduled payments coming out of their account.
Ensuring your finance team have the support and resources they need will help avoid this issue, as well as encouraging your employees to check their wage slips and speak up if they believe all is not as it should be.
Shady contracts
So much of your business hinges on contracts, without which you wouldn’t be able to govern your workforce. These can be complicated legal documents, and if you as a business owner don’t understand the ramifications of what’s written in them, you could become unstuck in the future. A lawyer can review employee contracts that you have in place and advise you as to whether there are any elements that need revision so as to remain compliant and avoid contractual legal issues that may otherwise come about.
Handshakes
No this is not in relation to unwarranted physical contact, but rather how a little bit of naivety can cost your business big. A deal sealed with a handshake, or a business plan hastily scribbled down in a work diary is not going to offer a clean-cut solution to any business disputes that may subsequently rear their ugly head. It may feel cold to insist on getting things down in writing when trying to embark on a new business partnership or deal, but it’s necessary in case a friendly start turns sour.
Under-insurance
Not only could you be forced to pay for any legal issues out of your own revenue if you’ve not got the right insurance in place, you could even be racking up costs of thousands daily even without any problems. Employers’ Liability insurance is mandatory, and if you’re not properly covered you could be fined £2,500 every day.
Speak to the team at MCM Insurance to see what your current insurance covers, and if there is room for improvement.