My Company is Being Sued – Now What?

Sherr Law Group-My Company is Being Sued – Now What?

Someone has sent you a letter stating that they have a claim against your company, or you have just received service of a lawsuit filed against your company, and you discovered that you may not have insurance coverage for the matter, what do you do?

  1. Gather Documents and Data – Gather all paperwork, electronic records, emails, and any other data concerning the claim, and start a central repository for all such documents and data. This is an important first step in making sure that all relevant material will be preserved and available for the defense.
  2. Contact your Insurance Company – Report the claim to your insurance agent, or insurance company. Let the insurance company determine whether there is coverage.  Also, provide notice as early as possible to the insurance company to avoid any waiver arguments.
  3. Create the Primary Contact – Determine who is the point person for the claim within your organization, and let everyone know that any inquiries or anything else to do with the claim should be referred to that person. This is important so that the entity is speaking with one clear voice, and the strategy remains consistent.
  4. Find a Lawyer – If a claim is not covered by your existing insurance, contact an attorney, either through a referral or internet searches who has significant experience in defense of such claims, preferably an attorney who focuses on “insurance defense.” It is important that you have an experienced lawyer, in defending claims such as yours and protecting your interests.  Also, most insurance defense attorneys have been trained to handle claims in the most cost-effective manner.
  5. Conduct a Legal Risk Assessment – With the attorney’s assistance, determine the level of risks (liability possibility; damage amount; assets at risk.) This is very important in determining whether it is cost-effective to pay the claim, settle the claim, or defend the claim.
  6. Agree on a Litigation Strategy – Develop a sound litigation strategy with your lawyer and establish a budget for the litigation. Establishing a budget will give the claim some predictability, and allow you to ascertain whether expectations are being met.
  7. Get the Right Business Insurance – Get proper liability insurance for the next claim. Unless there are no assets to protect, insurance is almost always the cost-effective way to protect you and your company’s assets.

No business owner ever expects to get sued. While it’s difficult and throws a wrench directly into your short-term plans, there are lawyers who deal with issues like yours every day and can help you fully understand what your legal rights are and how best to proceed. If you need a lawyer to defend you or your business, contact Tony Sherr, the managing partner at Sherr Law Group.


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