Apply a Strategic Approach If Your Business Is Sued

Apply a Strategic Approach If Your Business Is Sued

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As a small-business owner, getting sued is pretty much the last thing you want. Nevertheless, you should be prepared for it.

Businesses can be sued by former employees, clients, or vendors. And regardless of whether you win or lose the case, resolving the matter will likely be time intensive and expensive. Simply put, getting sued can have a significant, negative effect on any business, no matter how substantive or how frivolous the lawsuit may seem.

Given the potentially extreme consequences of a lawsuit, it’s natural if your first reaction is a purely emotional one. With that said, it’s important to think prudently and strategically about how to proceed. Here are a few important steps to consider.

Talk to your attorney

When you’re served with legal papers, your first step is to review the documents with an experienced business attorney. In some cases, if the files have been improperly drafted or if they identify a different person or business entity, the case can be dismissed altogether.

Talk to your lawyer, but don’t communicate directly with the plaintiff; remember that anything you say to them directly can be used against you in the lawsuit.

Inform your insurance carrier

Assuming you have adequate insurance protection, you may have some policies in place to help offset the expenses associated with a lawsuit. For example, if an employee brings a lawsuit against you because they were injured on the job, your workers’ comp policy may provide you with some support.

While you shouldn’t assume that your insurance policy will cover the suit, it’s definitely worth reviewing the terms of your policy and reaching out to an agent or broker if you have any questions.

Find a defense lawyer

Hopefully, you have a defense attorney on retainer or your insurance carrier is providing you with one. If neither of those things are true, you’ll want to find a reputable lawyer who has experience handling the type of lawsuit you’re facing.

As you look for the right attorney, make sure you seek someone who communicates with you clearly and effectively. If you interview a lawyer and don’t feel comfortable with their communication style, that’s reason enough to look elsewhere.

Respond to the suit

You should never ignore a lawsuit. Instead, collaborate with your attorney to determine how to respond. Most states require you to respond within 30 days, but this can vary.

Your response to the lawsuit should encompass:

● Admittance or denial or the allegations;

● Defense or counterclaims; and

● Whether you prefer a jury trial or some other form of resolution, such as an out-of-court settlement or mediation.

Your lawyer can guide you in determining how best to respond.

Stay focused on your business

Your lawyer will guide you through the suit itself. While the lawsuit unfolds, make sure not to cover anything up. Be prompt in reviewing all of your lawyer’s invoices. And above all, remain focused on your business. Lawsuits can be a drag, but they don’t have to prevent you from providing leadership to your team, and real value to your customers.

About the author: Amanda E. Clark is the president and editor-in-chief of Grammar Chic, a full-service professional writing company. She is a published ghostwriter and editor, and she's currently under contract with literary agencies in Malibu, California and Dublin. Since founding Grammar Chic in 2008, Clark, along with her team of skilled professional writers, has offered expertise to clients in the creative, business and academic fields. The company accepts a wide range of projects; often engages in content and social media marketing; and drafts resumes, press releases, web content, marketing materials and ghostwritten creative pieces. Contact Clark at


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