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Step 1
Consult an attorney to develop an iron clad contract and have anyone you do business with sign it. While verbal agreements with customers and other businesses may appear more convenient, a contract will protect your business most effectively in the long run.
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Step 2
Include an attorney fees clause in the contract. It should state that, should you win any court proceeding, the other party must pay your attorney fees as part of the judgement against her. That way, if your business does end up in court, at least there is a chance that the process will be of no cost to you.
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Step 3
Develop a limitation of liability clause for your contract as well. This clause limits the damages your business will have to pay if someone sues your company for a faulty product or service. The limit stated should be approximately equal to the typical cost of the product or service your business provides.
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Step 4
Consider adding a clause in your contracts that requires the parties involved in a dispute to resolve it through Alternative Dispute Resolution (ADR), such as mediation or arbitration. The cost of ADR is much more reasonable than court proceedings can be.
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Step 5
Purchase business insurance, which is a requirement for any business that provides a product or service that involves some sort of risk. Even if you already have insurance, consider increasing the provisions.
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Step 6
Confer with your insurance agent, should someone sue your business, to see if your business insurance covers the case. If it does, your insurance company will completely oversee the proceedings, which will help decrease your stress over the situation.
