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What to do if you are sued by another business

You just learned that your business is being sued by another business. Your revenue and reputation could be in jeopardy.

No need to hit the panic button yet – take these steps to protect your business from the outset.

Notify your insurers

Once you receive a demand letter or complaint, you should notify your insurance provider. Your general liability or professional liability policy is there to protect you if you face litigation. Do not worry if the amount requested in the lawsuit may exceed your coverage limit. Settlement negotiations often reduce the amount recoverable by the plaintiff, and sometimes plaintiffs drop the lawsuit altogether if the facts lean heavily in your favor.

Enlist help

You do not want to face a lawsuit alone, especially if you are facing a lawsuit by another business with deep pockets and a skilled legal team. Commercial litigation is more complex than your average slip-and-fall or wage-hour lawsuit and the stakes are often higher. In Florida, business litigators will have deep knowledge of the Uniform Commercial Code (UCC) that governs commercial transactions and contracts for goods.

Avoid communicating with the plaintiff

You should not contact the plaintiff or respond to questions. Leave communication to your legal team. This way, you avoid inadvertently disclosing information that could negatively impact your defense. If your business operations require ongoing communication with the plaintiffs’ employees, you must explicitly state that you cannot discuss any aspects of the lawsuit with them.

A lawsuit does not spell disaster if you approach it with a level head and seek assistance immediately.

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