Everyone makes mistakes. Even when you fulfill your contractual obligations, clients may be unhappy. The reality is that lawsuits happen, regardless of your actions. 

Risk mitigation is critical to preventing professional liability claims. To avoid confusion later, adopt recordkeeping and documentation best practices now. Documentation can provide proof to halt a lawsuit or reduce the damage.

Here are some strategies you can use:

Use clear contract language

Make sure your contracts use plain language and are clear. Specify your scope of work, what you will and will not do, and the expected outcome. Review the contract with your clients. Make time for questions so you can clarify any confusion early on. Encourage them to consult with their attorney if needed. This creates transparency and reduces the chance of misunderstandings.

Document everything

Keep detailed records of interactions, decisions, recommendations and actions relating to client work. This can provide evidence to defend your business should any claims arise. Showing you acted in good faith according to your industry’s ethical standards and other best practices can go a long way in court.

Document every step of your projects. Note what was done, why and who did it:

• Outline the scope of your services and any advice you offer.
• Keep minutes of meetings.
• Summarize important calls, like plan changes. Send the notes to all stakeholders.
• Keep detailed financial records, including invoices, receipts and billing statements.
• Record all customer complaints and feedback, as well as your responses and actions.
• Keep evidence indicating that the service was provided as promised.
• Create a recordkeeping retention policy that suits your industry requirements. For example, retain your records for as long as your work is guaranteed.

Communicate clearly and regularly

Regularly communicate with your clients and keep them updated on progress. Misunderstandings and miscommunications often lead to accusations of negligence. And even if everything is going fine, clients can get uneasy when they don't hear from you for a while.

Maintain a detailed account of every business transaction, decision and activity. Record the date, the people involved, what you discussed, and any results or decisions made. Maintain copies of all written communication with your clients, including letters, emails, text messages and faxes.

Consider leveling up to a client management system if your client interactions are challenging to track. Choose one with exceptional cybersecurity and tech support. It could streamline your process and make records easily accessible for future reference. 

Choose a system that works with how you keep records. For example, if texting clients is your thing, find a system that integrates your texts. You want a system that’s easy for you, not one you avoid using.

Obtain written consent

Obtain consent when making major decisions, particularly ones that could be detrimental. If you change your original project plan because of an unforeseen issue, document it. Get your client’s written consent to change the scope of the original project plan. Detail what needs to be done and why. 

For example, if you’re building a website and need to take it down for a week instead of a day, document the issue and get proof that your client understands and consents to the change. Otherwise, you could open yourself to a lawsuit for loss of revenue due to downtime.

Educate employees on skills, ethics and safety

Stay current on employee training requirements and beyond. Compliance-based entities like the Occupational Safety and Health Administration provide employers baseline regulations to keep employees safe. Why not go beyond what’s required? If your business is governed by a code of ethics, review it periodically. 

Put a premium on professionalism. This will help you reduce errors and accidents, retain high-performing employees and foster a conscientious workforce. Showing you care about your employees reflects in how they do their jobs. A job well-done will further reduce your risk of a lawsuit. (Remember to keep records of your employee training, too.)

Create quality control procedures

Implement quality control processes to catch and correct mistakes or issues before they escalate into claims. Regular audits can help identify deficiencies and improve services. 

For example, let’s say you own a roofing business. After each job, check the work quality. Clean up all the materials and tools, including the home’s gutters and yard. This reduces the chance of being sued. For example, clogged gutters could damage your client’s house, or a rogue nail could injure someone.

Forge client relationships

Treat clients with respect and professionalism. A strong, positive relationship can prevent many lawsuits from being filed. 

If you can talk through the issue with your client and figure out a way to correct the problem, you could save yourself some trouble. However, you should also document the new agreement and get your client to sign it. At the least, speak to your lawyer about your proposed solution. They’ll advise you on how to proceed and if a verbal agreement covers you.

Consult a lawyer familiar with your industry

An experienced legal professional can help keep you on the right side of the law. Follow your industry’s recordkeeping requirements. For example, construction businesses may require proof of safety inspections, incident logs and employee training. Therapists may need to obtain signed patient confidentiality forms and review patient confidentiality practices with their clients annually, regardless of information requests.

Get the right insurance

Professional liability insurance responds if you’re sued for the services, advice or products your business offers. Some professional liability policies include free legal consultations and information as a part of the policy premium. This can help you prepare for eventualities. Even the most cautious business owners can have a lawsuit filed against them.

A word on cyber and data security

Your professional liability policy won’t cover data breaches or cyberattacks. Cyberattacks and data breaches require special coverage.

For example, say one of your employees leaves their work device at a coffee shop during their lunch break. Someone steals it. The device contains all your client account information. This constitutes a data breach. Even though a cyberattack can happen while doing business, it’s not covered by professional liability insurance. You'll need cyber liability coverage for that.

Always safeguard your clients’ information to prevent security breaches and data loss. You can be sued for stolen or exposed data. Some cyber insurance policies include free services like cyberattack response plans. Ask your Rathbun Insurance account manager to review your cyber liability exposure.

Act on your plan

Call your lawyer and insurance agent to ensure your protection is in order. Make a risk mitigation plan part of your workflow. It can minimize your chances of a professional liability claim.

You may not hit every point on this list, and that’s OK. Don’t get overwhelmed. You don’t even need fancy software. Just getting into the habit of making daily notes about your interactions with clients can help keep you organized. That way, you’ll be ready if anyone questions something you did, and your clients will appreciate that you're on top of things. It’s a win all around.