"The Small Business Law Firm^SM"

I want to protect my business and personal assets from liability.  What can I do?
Asset protection (also known as risk management) is a two-step process:

ONE: Get properly insured.  Most businesses have required insurance (workers' compensation, etc.) but often overlook basic coverage such as general liability insurance.  Also, be sure to carry sufficient personal liability insurance in the event your business entity is pierced.  We suggest that every business owner carry a personal "umbrella" policy for this reason.  It's usually easy to obtain through your homeowner's or renter's insurance carrier.

TWO: Realize that insurance will not cover certain claims.  A common claim is employee related, such as wrongful termination or sexual harassment.  Unless you purchase a very expensive "rider" for these specific claims, you're on your own.  Therefore, every business should have a strongly worded Employee Handbook, coupled with proper training of supervisors, to minimize the risk of a legitimate claim.

In a lawsuit, who pays the attorney fees?
As a general rule, each party pays their own attorney fees (win or lose).  There are three basic exceptions:

1) By Agreement.  For example, if two businesses enter into a contract, that agreement may call for the prevailing party to pay the other's attorney fees.  This language must be mutual and unequivocal.

2) By Statute.  There are some state and federal statues that allow the prevailing party to collect attorney fees in a lawsuit.  An example would be federal civil rights litigation.  A different situation exists in Family Law cases, where any party with income or assets can be forced to advance the attorney fees of a spouse who otherwise cannot afford an attorney.

3) By the Court.  Some types of lawsuits (e.g., class actions) give the Court equitable power to award attorney fees to the prevailing party.

 What about other costs in a lawsuit?
Unlike attorney fees, a prevailing party is often entitled to recover their "costs" of suit.  This can be expenses like expert witness fees and deposition fees.  The best way to ensure this (if your case is solid), is to make a formal settlement offer under Code of Civil Procedure section 998.  If your offer is rejected, and you become the prevailing party, you are usually entitled to recover all costs incurred from the time of rejection.

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