Simply being a business owner can make you the target of a lawsuit. It’s rare for any company to go through its existence without facing the threat of litigation from some corner. When your business is facing a lawsuit, it’s easy to slip into panic mode. Fortunately, you have options. The following are some steps you can take to help protect your valuable business interests.
Understand the basis of the lawsuit
How you respond to a lawsuit will depend on the claims of the other party. It’s crucial to get an idea of the type of legal situation you’re facing. Is this a dispute over the terms of a contract? Is someone claiming you manufactured or sold a defective product? Does the claim involve a physical injury? Does the dispute involve copyright or trademark?
In many cases, it might be possible to settle a dispute before it reaches the litigation stage. However, you may not want to settle just to settle, even if you carry business liability insurance. You may believe that your company has not done anything wrong or that the lawsuit is frivolous. In this case, you might want to push back against the claims. However, it’s important not just to spend money to prove your point.
In some cases, it may make more sense to settle so that you can focus on the task of continuing to run and grow your business.
You’re not the first
It can be stressful and feel overwhelming when you find your business is being sued. However, you’re not the first business owner to find themselves in this type of situation. A skilled legal professional can help you protect your interests and help you determine the best way to respond to legal threats.