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Baker, Dublikar, Beck,
Wiley & Mathews

What should you do if you're being sued

You've been in business for a while without any major problems. You've always been fair to your suppliers or vendors. You treat your employees with respect. You honor your promises to your clients or customers.

So when that first lawsuit lands on your doorstep, it's natural to feel like you've had the wind knocked out of you -- especially if you think that the whole situation is unfair, not your fault or could simply have been avoided with a little communication.

What do you do now? Here are some tips:

  1. Call your insurance company. There's nothing to be gained by trying to keep the situation under wraps. You need to know if your business insurance indemnifies you against whatever lawsuit you're facing.
  2. Don't call the plaintiff. As much as you might want to just set the record straight or try to work things out, direct contact with the plaintiff can make your situation worse. You need an intermediary who can handle those conversations if or when they become necessary.
  3. Talk to an experienced attorney. If there's ever a time to throw your troubles on someone else's shoulders, this is it. An attorney can help you understand your options and decide if it's cheaper (and wiser) to settle, what alternatives you have and whether you should fight.
  4. Don't let it consume your thoughts. Having a lawsuit hanging over your head can be distracting and emotionally draining -- but you'll hurt your business if you let it become your primary focus. Once you've turned the issue over to your attorney and your insurance company, it's time to focus on your company again.

The harsh reality is that it's almost impossible to own a business without occasionally encountering legal problems. It's wise to learn to take them in stride -- as much as possible -- so that you don't let these bumps in the road interfere with your overall success.

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