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How to Prepare for Business Litigation – Tips for Small Business Owners

Business Litigation

Many small business owners are not aware that lawsuits are a sizeable risk, even for their small establishment. Small businesses truthfully have many of the same legal risks as larger corporations.

The best way that small business owners can prepare for legal troubles is to purchase insurance. Once a lawsuit is filed against the organization, the business owner should meet with an attorney who has extensive experience with business litigation, avoid communications with the defendant, and preserve or document all available evidence.

Below, we’ll explore more on how business owners can protect their small business litigation.

Prepare for Litigation

Entrepreneurs can run into legal trouble for countless reasons: disputes with partners, changes to the corporate structure, customer complaints, issues with employees, disputes over intellectual property, and more. They may also have cause to initiate a lawsuit against another entity. Small businesses are highly vulnerable to fallout from legal claims, but luckily, there are some things owners can do to prepare for unforeseen circumstances.

Acquire Insurance Coverage

Every small business owner should purchase business insurance as soon as their establishment is up and running. A general liability policy is a great place to start, but many industries will also have access to specialized insurance plans that offer better coverage. Insurance will cover many types of disputes that arise in order to help protect the business from financial hardships.

Meet With an Attorney

When a lawsuit is filed against a small business, the first thing the owner should do after contacting their insurance provider is set up a meeting with an attorney. With years of experience in litigation and business disputes, a business litigation lawyer can help the small business investigate the claim, navigate the process of litigation, decide on an appropriate strategy, and immeasurably increase their chances of a successful outcome.

Refrain from Contact with the Defendant

It is imperative that small business owners avoid contacting the defendant of a pending lawsuit, and if the defendant attempts to initiate contact, it should be ignored. There are two reasons for this rule.

Firstly, any communications with the defendant can be used against the business owner in court, for example, an apology may be used as an admission of guilt. Lawsuits are also stressful, and communications may turn heated and prejudice the judge or jury against the business owner. It is best to avoid this risk entirely.

Business Litigation

Prepare the Evidence

A final tip for those facing litigation is to get the evidence prepared early. A well-documented series of events is an invaluable resource for defending a business owner during litigation. The evidence may include a written personal recounting of events, statements from any individuals were involved, contracts, letters, and any other written documentation that can be used in favor of the business owner.

Final Thoughts

The best way for a small business owner to make it through litigation unscathed is to be prepared. Following the above advice may be the only way for them to find continued success in the face of legal trouble, whether they are the recipient or the instigator.