It is essential that you know what to do if your business is facing a lawsuit. Any company, small or big, new or established, can face a lawsuit anytime. There are a couple of reasons why your business could get sued; it could be because of:

  • A disgruntled employee
  • An unhappy customer
  • A supplier
  • A business partner
  • A business rival
  • Someone claiming that he/she got hurt because of your product
  • The government

Knowing what actions you can take if you get sued can be beneficial to your business.

  1. Review the lawsuit with the help of an attorney.

The first thing you should do upon knowing that a lawsuit has been filed against your business is to review it with the help of your attorney. Here’s how to review a lawsuit.

  • It is essential to review the lawsuit papers to check for errors in it. If the information found in the suit papers are wrong, you have the right to dismiss the lawsuit.
  • If all information is correct, you may move on to reviewing the said allegations and put a preservation order in place. By doing so, you should be able to preserve all information and data that may have a relation to the lawsuit.
  • Also, you should avoid talking to the plaintiff directly before you review the lawsuit. Remember that anything you say about the lawsuit or to the plaintiff can be used against you. Communicating with the plaintiff should only be done by your attorney.
  1. Notify your insurance company immediately.

Most insurance providers have insurance policies that may help a business in the event of a lawsuit.

  • Your general liability insurance can cover third-party accusations and injury claims.
  • Your professional liability policy can cover client allegations against your services or products.
  • Lawsuits from your employees or workers can be covered by your employer’s liability insurance.

If you believe that the lawsuit falls under one of your insurance policies, contact your insurance provider immediately. However, it is important to remember that while there are types of lawsuits that can be covered by your general liability policy, don’t assume that your insurance company will automatically cover the lawsuit against you. It is imperative that you consult with your insurance provider first to see if the lawsuit is covered or not. There might be some specific circumstances about the lawsuit that may exclude it from your insurance policy.

  1. Figure out how are you going to respond to the complaint.

Now if a lawsuit is filed against you, you have at least 30 days to make a written response to it. When writing your answer, it’s imperative that you include the following things:

  • It’s important to state your admittance or denial of the plaintiff’s allegations.
  • State also your defenses and counterclaims against the plaintiff’s allegations.
  • State if you want an alternative dispute resolution like an out-of-court settlement or if you’d instead like to proceed with a jury trial.

There are also some important things to consider before you write a response to the complaint.

  • Understand first the nature of the lawsuit against you as well as its possible consequences so you can come up with a business decision on how to proceed with the case.
  • Learn about details of the litigation plan, exit strategies, and estimated costs of the legal proceedings from your attorney.
  • Talk to your attorney first to find out if it’s good to propose an alternative dispute resolution to the plaintiff or not.
  • Ask your attorney about the pros and cons in proceeding with the lawsuit.
  • Try asking your attorney if you have a basis for a counterclaim against the plaintiff or a third party that may be partly or fully liable.

Regardless of what your response is, be sure to consult with your attorney first before sending it. Just be sure to respond to the lawsuit within the allotted time because if you don’t the plaintiff will win the case by default.

  1. Find a skilled and experienced defense attorney.

Be sure to find a skilled and experienced defense attorney, if you still don’t have one. It’s important to remember though not all lawsuits are the same and you may need to find an attorney who is skilled in the type of lawsuit that you were served. Also, legal defense is not cheap, so you want to make sure that you are spending your money on an attorney who is really capable and knowledgeable.

  1. Consider a settlement.

Normally when businesses are being sued, they usually want to defend themselves and win the case no matter what. Even if you think that you are on the right side, opposing lawyers and judges will always not agree with you. In this case, you must think about the best interests of your business by considering a settlement agreement with the plaintiff.

All businesses are in danger of being sued at any time. Now, lawsuits are extremely stressful but with the help of the tips mentioned above and your attorney, the tension of the lawsuit should lighten up. Your attorney will help you with your case and get the best result. We hope you found this article informative.

About the Author:

Michael Lawson is a specialist bankruptcy attorney who has helped many clients in the past move past their bankruptcy. He currently writes for In his spare time, he likes to enjoy some downtime traveling with his family.

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