There are many costs in litigation and not all are financial. Most litigation lawyers will tell you there is also a cost in time lost, stress and the reputation of the business. If you’ve been unfortunate enough to be sued by an unhappy employee or client, how can you mitigate the loss faced by your business and by you, as the business owner and possibly, the manager?
In fact, this is most likely the easiest one. You need to have enough insurance to pay both the court costs and the payout to the person who sued you. It should also cover the costs inherent in lost time and loss of key staff, if that is an issue – and it often is. Employees take sides and are likely to leave if they side with a fellow worker they perceive as being in the right. No one should ever start a business without the right kind of insurance. If you can’t afford it, you should not be in business.