You’re a smart, responsible business owner, and you’ve always taken extra steps to limit your risk and keep your business liabilities down — but lawsuits happen. You can’t always prevent them.
You can, however, have a plan in mind for how to respond once they do. Here is a quick guide that can help you figure out your next step once the accusations start flying:
- Don’t try to handle the issue directly. Until you’ve fully reviewed the situation, evaluated the available evidence and completely understand any legal issues that may be involved, it’s wiser to avoid communications with the other party. You could say or do something that will weaken your position.
- Gather up as much documentation as possible. You need to get a better picture of the whole situation — and that will probably mean pouring over emails, invoices and receipts. Get things in order so that you can easily work through the details of the events that unfolded.
- Let your insurance provider know about the problem. You may have general liability insurance or a professional liability policy that will indemnify you in this situation. If so, they may pay your attorney fees. (Don’t assume that your insurance company will cover anything, however, until you have it in writing.)
- Talk with an attorney and develop a strategy. It may be in your best interest to try to negotiate a settlement or make some other kind of mutually beneficial agreement with the other party. Sometimes, however, litigation really is the wisest course of action. You won’t know until you’ve had a chance to discuss the options.
Finally, put your business litigation troubles in your attorney’s hands as much as possible — that way, you can focus your energy and attention on your business.