What do you do when your business is being sued?
When your business is being sued, it can feel like all of the hard work of you and your employees is at stake. You will likely be notified of the lawsuit when you receive a Summons and Complaint. The Summons contains a list of charges against your corporation and maybe other entities as well as a deadline by which you must answer to the Complaint. It can claim that your firm violated a contract, that the plaintiff suffered personal injury, or that your organization cause damage to the plaintiff’s property. Whatever the plaintiff may be claiming, the complaint will end with a request for remedy, such as monetary damages.
Here are the steps you should take if your business is being sued –
Contact Your Insurance Provider And An Attorney
Regardless of whether the allegations are true, these are the most important first steps: 1) Get in touch with your insurance provider; and 2) if you think the lawsuit’s claims won’t be covered by an insurance policy, get in touch with a lawyer.
If your business has an insurance policy that covers the kind of claim brought against it, your insurance provider will retain a lawyer to represent and defend your business. If your business does not have insurance that covers the specific claims asserted in the complaint, you should speak with a litigating attorney as soon as possible.
You should also take action to preserve any evidence that might be crucial or connected to the litigation, among other things. Other steps may be necessary, depending on the nature of the litigation.
Do Not Ignore the Complaint or Try to Represent Your Company
Ignoring the issue in the hopes that the conflict would go away after filing a complaint is not an option. The format of your response must follow your state’s Trial Rules, which may have stringent timelines for responding to complaints.
In order to enforce a default judgment, the plaintiff may take a number of steps, such as freezing the bank accounts of your business and foreclosing on company-owned real estate. Of course, these activities have the potential to disrupt business.
Do Not Attempt to Represent Your Company Yourself
It is not advisable to try to handle a lawsuit brought against your business on your own. Depending on the state, it may be forbidden for non-attorneys to appear in court on behalf of corporations or limited liability companies.
This restriction is in place primarily because corporations and limited liability companies are regarded by the law as distinct legal persons from the people who own them. You would represent a separate individual and act as if you were an admitted attorney by appearing in court on behalf of the company. Such representation would not be allowed by the judge. It is therefore almost as bad as ignoring the Complaint to try to represent your company yourself or through a non-attorney, and doing so could result in a default judgment.
Bring Your Complaint Seriously
The person who sued your business takes the case seriously. And you ought to. Protect your business by getting in touch with a litigation attorney immediately.
