Are You Facing a Business Lawsuit? Here’s What You Should Do


For any business, facing a lawsuit is a nightmare that can cause huge drawbacks. It can drain your resources, time, energy, and finance, which can be disastrous if you’re a small business operating on a limited budget. And the biggest drawback? It can impact your bottom line – driving your sales down and tarnish your reputation.

Business lawsuits may only come with court-imposed financial penalties, but most of the time, the repercussions go beyond that. It may prompt you to make the tough decision to close the company. With so much at stake, it’s critical to be smart with your next move. Read on to know how you can cautiously deal with unavoidable litigation.

  1. Review the case with a good lawyer

The first and most important thing you should do is review the lawsuit papers with your trusted business attorney. Experienced lawyers recommended looking into the lawsuit’s description and service details first. For such sections, you’ll see the person or entity associated with the case. You have the power to dismiss it if any information is incorrect. Given that the details are correct, continue checking the allegations and put a preservation order in place, wherein you need to preserve every data associated with the legal action.

Furthermore, your general business attorney can help you find an attorney or expert specializing in your suit and case if deemed necessary. For instance, if you’re anticipating arrest, they can search for a trusted bail bond agent who can help post your bail when you need to.

  1. Gather all your visual evidence

Speaking of putting a preservation order or litigation hold in place, this is the right time for you to retain all relevant records that can help you in the suit. These could include pictures, videos, voice messages, or emails. Strong visual evidence can make or break your case.

Upon halting your company’s data-destruction policy, be sure not to talk to the plaintiff in any way. Have your attorney do the work. Discussing the suit in high emotions can do more damages to you. You could say something that they can use against you or even strengthen the suit.

management reviewing company policy

  1. Contact your insurance provider

The next step is to make sure that your insurance provider is informed of the filed complaint. Business insurance policies are there to protect you from concerns such as litigation. For instance, professional liability insurance can protect you from client allegations that they suffer financial loss because of your business. Or, employment liability insurance can cover suits from employees.

If the particular lawsuit you’re facing is under your policy’s umbrella, then they’re likely to pay for your lawyer’s fees, court expenses, and any judgment or settlement you’re required to pay off. Keep in mind that a general liability policy can cover only specific lawsuits, so be sure to consult your insurance company first.

  1. Plan how to proceed and respond

One critical thing to note is that there’s a deadline for you to submit a written response upon receiving your suit. Depending on your state, this is usually within 30 days. In drafting your response, include your denial or admittance of the allegations, your choice to go to a jury trial or an alternative, and your counterclaims or defenses against the plaintiff.

Planning how you can proceed with the suit requires your full understanding of the claims’ nature, as well as any potential liability to your company. Don’t hesitate you ask your attorney about the possible exit strategies and litigation place for the proceeding. Regardless of how you decide to proceed depending on your case, don’t forget to have your response or motion checked by the right lawyer.

  1. Explore alternative strategies

It can get too expensive for a company to face a lawsuit. To minimize monetary damages, check with your business attorney about alternatives that you can take into account. For instance, if you’re getting sued for a faulty product or delayed delivery, you might need to consider suing your supplier to cover for potential losses. If, let’s say, the plaintiff is the one at fault, you might need to focus on getting the case dismissed by a judge.

As a business owner, it’s important to be very cautious as you move forward. Follow these steps and take a close look at every detail to figure out the best course of action. Doing so will allow you to minimize the damage that the litigation can cause to your company and position yourself better on the case.

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