What do I do if my business is sued?

Greetings: All businesses, from the largest corporations to the smallest corner stores, should view lawsuits as part of doing business in a capitalistic environment.  Lawsuits provide stability in the economic chain by allowing participants an organized structure to resolve disputes.  If a business is sued, it should view it no differently than any other event in the businesses' life cycle.  

One of the first steps a business should take when sued is to immediately contact its general counsel or an outside lawyer.  Time is of the essence because lawsuits have deadlines and a lawyer will know when the business must respond to the lawsuit.  Another step a business should take is to preserve information related to the lawsuit.  This may be documents, emails, text messages, photos, and more.  The lawyer will be able to guide the business through this process.  A third step is to review any insurance the business may have that may cover the lawsuit.  The lawyer, here too, will be able to help by reviewing the policies and, if applicable, tendering the defense to the insurance carrier.  Finally, the business should go back to doing what it does best - operating its business.  Once a lawyer is retained, it is the lawyer's job to take on the lawsuit, not the business's job.  Always have a good lawyer ready to go.  

If your business is sued, initially, it is important to stay calm and take the situation seriously. 

A lawsuit usually begins with formal legal papers, such as a summons and complaint, which explain who is suing you and why. These documents include deadlines, and missing them can lead to serious consequences like a default judgment. 

At this stage, many businesses consult an attorney to help interpret the claims, explain the process, and outline possible responses. Lawsuits can involve procedural rules that vary by jurisdiction, and understanding those rules is critical.

If your business has insurance—such as general liability, professional liability, or employment practices coverage—you should review the policy to see whether the claim might be covered and whether the insurer requires prompt notice.

While every lawsuit is different, understanding the basic process and your options can help you make informed decisions and protect your business interests as the matter moves forward.

This answer is not legal advice.