Business | Franchise | Employment | Litigation

What to Do if Your Business is Being Sued

Despite your best efforts, your business is now the subject of a lawsuit. After receiving a demand letter, your actions were obviously insufficient to the other party. Once litigation has run its course, you are free to reflect on how you got to this point. In the meantime, though, you have a few steps to take to get ready to respond to the lawsuit and handle the situation. This blog will cover four actions you should take to respond to a lawsuit filed against your company.

Step 1. Cease communication with the plaintiff.

You probably tried everything you could think of to settle the dispute amicably without the need for litigation. Once you receive notice of the plaintiff’s intent to sue, though, you must recognize that the opportunity to talk things out with the other party has passed. You should make it clear that any further inquiries and communications will need to be directed to your lawyer.

Step 2. Speak with an attorney.

As soon as you are able, get in touch with your in-house counsel or outside attorney to gather your bearings and strategize about your next steps. Your attorney will be aware of deadlines to respond to the lawsuit and provide other documents. Additionally, he or she will examine the papers you were served with to ensure that all pertinent information is included and that everything was served correctly. If there is an error on any documents, you might be able to get the lawsuit dismissed.

Step 3. Be transparent about everything – especially with your attorney.

Your lawyer cannot protect you from something he or she doesn’t know. Facts that are relevant to the lawsuit will come out anyway, so it’s always a good idea to be upfront with your counsel. Being transparent also means holding onto all records, emails, letters, invoices, and other documents. Once your legal team has all the relevant information, everyone can strategize and determine the best way forward (responding to the lawsuit, settling out of court, etc.).

Step 4. Notify your insurance company.

As an entrepreneur, you likely have several insurance policies that protect your company’s finances. Depending on the nature of your policies and the allegations made in the lawsuit, your insurance should cover fees associated with litigation. If you are covered, insurance providers usually require immediate notification if you are served with a lawsuit. In addition to notifying your insurance company, you should also not simply assume that you are covered.


It is understandable to feel overwhelmed, angry, or indignant if your business is facing a lawsuit. However, you should channel these feelings into action. One of those actions should be to contact a knowledgeable and effective business law firm, such as Trembly Law Firm. Please call us at 305-431-5678 to speak with a member of our team today.

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