There can be any number of reasons that another party may take action against your business.
It might be because of a miscommunication, a mistake, or an accident. Sometimes these things can’t be smoothed out easily, and you may find you are faced with a legal claim.
When you first things about being sued, or you are facing being sued, it is a stressful and upsetting time.
Not to mention that it can get expensive and messy too. There are, in fact, 8 common shady pre-settlement funding scenarios you must avoid too.
Most people will want to settle as quickly as possible, and that can happen with the right legal support in place.
However, you should know the first few steps that you can take to protect your business.
1. Step one
The moment you are given any notification that you are being sued, you should seek legal advice. A legal representative will be able to talk you through what you need to do. It might be the case that you are at fault and are without any insurance.
Your circumstance will make a difference in how you should act.
You should also take steps to make the rest of the board or officers of your company aware of the situation too.
You usually don’t have more than two weeks to respond, and it is vital that you do so. If you do not, the claimant can get a judgment against you, and you will automatically lose.
You can usually choose if you wish to settle, admit liability, or fight the claim.
If you know that you are in the wrong and you wish to admit liability, then you will need to check in with your insurance company. You need to do this quickly, as you might end up cover more than just the cost of the mistake.
You can opt to pay the full amount, or you might choose to fight that and pay a lesser amount. In some cases, the claimant will need to pay the court costs, such as if they didn’t give viable time to investigate and settle the claim.
The court may allow you to pay the costs in installments. It is important that you do not offer this is you might not be able to pay each installment, as you will be liable for the full amount.
You can also offer a different amount that you find reasonable. Your legal team will be able to help you find an amount that makes sense.
3. Defend the claim
If you are not at fault, and you have legal grounds, you can defend the claim. In this case, you will need to go through the courts, and the procedure might take some time. There will need to be plenty of evidence collected.
If you happen to lose the decision when in court, you have the legal right to appeal in most cases. In general, almost all claims are settled, so that going to court is not necessary.
A key takeaway is that you make sure that you have the insurance to cover you and your business should anything happen.