Without a doubt, employee-related litigation is the most prevalent type
of litigation faced by small businesses. Even when a business has only a few employees, management must understand all employee rights. If you comply with the handbook and the rules regarding employees' rights, employees should be discouraged from suing you, or you should have the upper hand if they do.
Unless a small business is very careful (some might even say lucky), it
...

Without a doubt, employee-related litigation is the most prevalent type
of litigation faced by small businesses. Even when a business has only a few employees, management must understand all employee rights. If you comply with the handbook and the rules regarding employees' rights, employees should be discouraged from suing you, or you should have the upper hand if they do.
Unless a small business is very careful (some might even say lucky), it
can expect to face a major lawsuit some time during its first five years
of business. And the more successful the business, the greater the
likelihood of being sued.
The source gives several areas that need advice.
RELATIONSHIPS WITH INVESTORS
RAISING MONEY
TRADE NAMES
SELLING AND BUYING PRODUCTS

My personal observation is that health issues are most common. That is probably because I am most interested in them.

Tattoo parlors, beauty salons and apartment owners are the top three small businesses which are sued most often! Infections from tattoos, tattooing minors, hair disasters and disgruntled tenants seem to be the major reasons to sue, usually in small claims court! Restaurants would be next on the list!