What to Do When Your Business is Sued

A lawsuit against your business can be a complete nightmare, whether you’re a startup or a well-established company. It is important to remember that if you are sued, it does not mean that you will be found liable; there is a substantial process to go through before a decision is made in that regard. The process, however, can be costly.

Here’s what to remember if the worst should happen and your business gets sued.

Getting sued

Stay Calm

Staying calm and refusing to panic is easier said than done. However, you need to have a clear head to make rational decisions at this time. After finding out about the lawsuit, take a few minutes to breathe and get your thoughts in order before making any calls. You will need to be able to answer questions logically and communicate effectively.

Call Your Insurance Provider

One of the most important things you can do for your business is have insurance that covers the various facets of your needs. Liability insurance, workers’ compensation, and property insurance are just a few different types of coverage that can keep you safe should a legal situation arise. However, you’ll have to have insurance in place beforehand. In this case, preparedness is essential.

If you have insurance, call your insurance provider and let them know that a situation has arisen.

Call Your Lawyer

If you know the person who is suing you, it can be tempting to call them and demand answers. Refrain from doing this. After calling your insurance provider, you need to call your lawyer. Your lawyer will be able to walk you through what’s to come.

Depending on the situation and your insurance coverage, your insurance provider may appoint an attorney to you. The benefits of having your own attorney depends on the situation at hand. Nonetheless, if you have a lawyer on file you should give them a call and determine your plan moving forward.

During your call with both the insurance provider and lawyer, you can expect to be asked a series of questions pertaining to the incident and those involved. It is important to stay calm and keep a clear head during this process, as the answers may be the foundation of your case.

Attorney at work


Depending on the situation, your lawyer and insurance provider may work to negotiate a settlement between you and the prosecuting party. Doing so can prevent a costly trial and provides the opportunity for discretion. Many people choose to settle out of court simply to make the problem smaller. Others prefer to go to court if they know they have the resources to win. The situation and the size of your company will be integral in determining your next steps.


If you do not settle and the lawsuit is not dropped, the case will likely go to court. During the pleadings, a complaint will be filed by the prosecution and responded to by your attorney. There will be a scheduling and discovery to determine what happened from both sides. Motions may be passed to demand proof or dismiss certain details. Another attempt at settling may be initiated. If the parties do not settle, it will go to trial, a verdict will be made, and damages will be awarded if you are found liable.


If the trial goes in favor of the prosecution, you can file an appeal to overturn the verdict. To do so, you’ll need to be in touch with appeals attorneys who will review your case and tell you if your appeal has merit. If it does not, the best thing you can do is ensure you make changes so that you never find yourself in this situation again.