No one goes into business expecting to be sued but unfortunately, it does happen. It could be a customer, a supplier, another business or an employee that files a claim against you and win or lose it is likely to cost you money. Even worse though is the harm it can do to the reputation of your business and that could lose you sales. You need to have the matter dealt with as quickly and as amicably as possible, so what should you do if someone sues your business?
Speak With An Attorney
This should be the very first thing you do. You need to review the situation with a specialist, such as a nursing license defense attorney if the claim against you is for medical malpractice, or a ta lawyer if your issues are with the IRS. Different areas of lawsuits need different specialist knowledge and not seeking the right sort of assistance could affect your chances of winning the case.
When they are reviewing your case, if any information in the litigation is incorrect they are able to put the case on hold and also apply for a preservation order. This means that both parties must retain all data relating to the legal action.
You should always be honest and open with your attorney and do not try to hide anything from them. They cannot handle your case effectively if they only have half the facts.
You should have no direct contact with the person or company that is accusing you. Once they file a lawsuit the time for talking has passed and if they do contact you, you should refer them to your attorney.
Inform Your Insurers
There are many different types of business insurance policies to cover these sorts of eventualities, and if you have such a policy you should inform your insures of the impending court case. If you are covered, normally the insurers would pay your attorneys fees, court costs and any money that has to be paid to the other party. You should never just assume you are covered though as sometimes there can be specific circumstances that exclude it from the policy.
Do Not Ignore It
One of the worst things you can do if you’re sued, is to ignore a lawsuit. After a specified time, the plaintiff will win the case without you being able to do anything about it.
When you first receive it you will be given a time limit to respond, in most states, this is 30 days. You have that time to confer with your attorney and decide how you will respond. Before you do that, you need to understand the nature of the claim and the potential liability you and your business are exposed to.
Your attorney should make a plan of action with you and explain the pros and cons of defending the claim. Your level of insurance could also affect your decision at this point, and you only have those few days to get all this sorted out.
All the time the case is going on you need to deal with any requests for information promptly, as the more times the attorney has to ask you for things, the larger their bill will be. You also need to remember that while all this is going on you still have a business to run, and you need to stay focused on that too.