Is Your Business Getting Sued? What To Do Next
All this while you were probably imagining this situation in your head but now that it has happened, you are not sure how you should take it. This is because a small business getting sued is the worst thing ever and it is not only a huge financial loss but also the loss of your reputation. Whether it is by a rival company, a client, an employee or a vendor, it is quite normal to feel disoriented and disturbed because a lawsuit could also mean losing the business altogether.
Here are a few things that you could do to save your business from a lawsuit.
Hire an attorney
As soon as you receive the lawsuit, the first thing to do would be to discuss the same with your company’s lawyer and if you do not have one, hire a competent lawyer who is experienced in this field. Discuss the entire lawsuit with him or her and find out whether the identity of the person trying to sue your company is clearly mentioned in the letter or not. If it is not mentioned, you could always move the lawsuit to dismissal. If it is mentioned, do a request for a preservation order. This will require you to preserve and hold all documents and data associated with the matter.
No communication with the plaintiff
This is of utmost importance. No communication, whatsoever, should be held with the plaintiff regarding the lawsuit. Often, such communications are held against you in the court of law. Once the lawsuit is issued, all communication should be held between respective lawyers and not between the accuser and the accused.
Insurance provider must be informed
Often, insurance companies cover the charges of a lawsuit. To know whether your insurance provider covers it or not, you must get in touch with them as soon as the lawsuit is issued. If your employer has suffered financial losses because of your business then a liability policy might cover the charges for you. There are other costs as well that come as a surprise when a lawsuit is issued. These are court costs, attorney costs etc and those could also be covered by your insurance provider.
Invest in alternate sources of income
You could invest in an alternate source of income that might help you to sustain your expenses till the lawsuit settles and your business starts running as usual.