10 Ways How Small Businesses Avoid, Reduce Lawsuit Risks, Per Small Business Center


On Sept 4, 2019, the National Federation of Independent Businesses (NFIB) published “Ten Ways to Stay Out of Court,” and provided a copy to MHProNews.


The NFIB said the outline aimed to provide insights on the following.


  • General best practices.
    • Guidance on hiring and managing employees.
    • Self -Audits for wage and hour compliance.
    • Common pitfalls and issues to watch.

About the NFIB Small Business Legal Center

  • We are the voice for small business in the courts and the legal resource for small business owners nationwide.
  • While the information provided in this presentation is intended to be accurate, it should not be considered legal advice. The Legal Center cannot be held responsible for any errors or omissions. That same disclaimer is hereby expressed by MHProNews.


Litigation Statistics

  • U.S. tort system costs over $260 billion per year – a staggering $880 per person!
  • 70 percent of the world’s attorneys live in the United States.
  • 94 percent of all lawsuits in the world are filed here.
  • Small business bears significant tort costs.


It is worth noting that per the SMB blog, “Of the 56 signers of the Declaration of Independence, 25 were lawyers. Of the 55 framers of the Constitution, 32 were lawyers.”


The Economics of Litigation

  • Its easy to make an allegation, but difficult to disprove.
    • Litigation is exorbitantly expensive.
    • Vast majority of suits settle.
    • Save money by seeking competent counsel.

Rule #1: Incorporate

  • Asset protection and tax benefits.
    • Have your attorney or accountant review your corporate records once a year.

Rule #2: Stay Alert

  • Keep good records!
    • Carefully record transactions you make with your business.
    • Deposit all business receipts in a separate account.
    • Proactively talk with CPA or tax attorney about tax planning

Rule #3: Maintain Adequate Insurance

  • Read the fine print!
    • Comparison shop— specialty broker might help.
    • Don’t be cheap—increase liability coverage, consider umbrella, business interruption, disability, and employment practices liability insurance.


Notice how many points are made about employment hiring practices? The potential risk of litigation, state or federal jobs related claims are significant.


Rule #4: Hire Smart – Applications
• Make good hiring decisions.
• Require job applications from all candidates.
• Check references.
• Prepare a list of standard questions!
• Only ask appropriate questions that shed light on the applicant’s capacity to perform functions and duties of the job.
• Do not ask questions that could reveal whether the person belongs to a protected group (questions about sexual orientation, religion, race, etc).
• Do not ask questions about the employee’s medical history.

Don’t ask:

– Do you have any medical conditions that would interfere with your ability to perform the job?
– Have you ever been treated for drug abuse?
– Have you ever been arrested?
– Are you taking any prescription drugs?
– Have you ever been a member of a union?
– Do you have small children?
– Have you ever filed for workers compensation?

Rule #4: Hire Smart – Background Checks

  • Adopt a uniform policy for running background checks.
    • Get applicant’s permission in writing.
    • Clearly identify the information you will be checking.
    • Evaluate criminal history findings on a case-by-case basis.


Rule #4: Hire Smart – Immigration
• I-9 for all new hires.
• I-9 penalties range from $275 to $2,200.
• If your business has established a pattern or practice of hiring illegal workers, you may face jail time.

Rule #4: Hire Smart – Immigration
• If you find incorrect information, correct and initial or have employee fill out a new form and attach to the old form.
• If information is missing, fill in the information and initial and date that section. (Do Not Backdate!)
• Store all I-9s together.

Their full report is available at this link here as a download.  Examples of some legal issues that have roiled our industry are further below the byline, offers, and notices.  Some of them are relevant to the NFIB tips.

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According to sources at NFIB, they have a similar number of manufactured housing industry member firms as the Manufactured Housing Institute (MHI) claims.  SourceWatch said in 2018 that the NFIB had 350,000 member firms. That’s a wrap on your almost-midnight installment of manufactured housing’s runaway most-read “Industry News, Tips, and Views Pros Can Use” © where “We Provide, You Decide.” © ## (News, analysis, and commentary.)

SoheylaKovachDailyBusinessNewsMHProNewsMHLivingNewsSubmitted by Soheyla Kovach for
Soheyla is a managing member of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and Connect with us on LinkedIn here and

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