What to do when your business is the subject of a personal injury lawsuit

Personal Injury Law

As a seasoned business owner, you’ve experienced your fair share of ups and downs—controlling operations, sales, cash flow, and managing employees.

Getting sued is probably the least of your concerns.

However, the truth is a business is often threatened with lawsuits more than one might initially expect. In some cases, a lawsuit can financially devastate your company. Not to mention, it could damage your business’s reputation if the verdict favors the plaintiff. After months of trials, your company is at risk of losing a substantial amount of money and may become embroiled in constant and damaging litigation.

If your business is the subject of a personal injury lawsuit, you must be proactive and devise a strategy as soon as possible to protect your business from losing the case. Check out these tips to avoid unnecessary law missteps.

Contact a business attorney

Legal matters can be complicated and overwhelming, especially if you don’t have prior experience or legal knowledge. If you’re unfamiliar with the proceedings of a personal injury lawsuit, you’ll need to review the lawsuit papers with a qualified business attorney, soon as you receive them. Most business lawyers possess the knowledge and experience to evaluate the paperwork carefully and advise accordingly. Experienced attorneys like Schwartz Law Firm often suggest that you review the service and caption information on the suit to determine if it contains the correct entity or party associated with the lawsuit.

If the information is contradicting in any way, you may proceed and dismiss the action. However, if the information is correct, you should continue to review the allegations and preserve order. Meanwhile, you need to file all the necessary records that may relate to the case for your ready access.

Collect appropriate information

When your business faces a lawsuit, you’ll want to collect every form of information that could help develop a case. Your lawyer will inform you of the type of data that could be relevant.

For a proactive approach, prepare all the necessary paperwork, including copies of letters, contracts, emails, invoices, documents, and other records. Make a written account of events that led to the lawsuit, including statements from bystanders or employees involved in the incident.

To avoid losing your case, reserve all other materials that are related to the lawsuit, including voice messages, photos, and videos. Most importantly, consult your attorney about any documents or forms evidence you should destroy.

Submit a claim to your insurance provider

There are dozens of business insurance coverage programs to protect businesses in case of a lawsuit. For instance, accusations of defamatory and third-party injury allegations about a competitor are often settled by a general liability policy. Professional liability insurance covers client claims that assert that your service or product caused them financial distress.

In the case of employee injury allegations, either an employer’s liability policy or employment practices liability insurance will cover the legal proceedings. If these allegations fall under a category that your insurance covers, your insurance benefits will pay for court expenses, lawyer fees, and compensation. If your current policy programs cover the lawsuit, ensure you contact your insurance company as soon as possible, so they can start processing your benefits.

Decide how to respond to the complaint

When served a lawsuit, you’ll receive a deadline to present a written response within a specified period, usually within 30 days. Note that this deadline may vary from one state to another.

Your response should include your denial or admittance of each of the complainant allegations. You’ll also need to provide your counterclaims and defenses against the complainant and other defendants. As a final step, you’ll need to decide if you’d prefer a jury trial, out-of-court settlement, or an alternative resolution.

However, before you address any of the allegations, you’ll first need to understand the claims made against you, their impact, and the potential liability of your business so that you can make informed decisions regarding the lawsuit.

Once you’ve reached this point, your attorney will help explain the estimated costs at different court stages and draft a litigation plan and a potential exit plan. Your lawyer will also help you identify the best form of dispute resolution.

Communicate promptly with your attorney

A business lawsuit can involve severe financial and reputation implications, which is why proper communication is crucial. If your lawyer is a poor communicator, seek the advice of other legal professionals. It would help to maintain consistent communication to ensure the litigation process runs smoothly.

In many cases, the defense process can consume a substantial amount of financial resources, so you’ll need an experienced, knowledgeable attorney who can help you win your case and protect your business from unfavorable rulings.


As a general precaution, avoid lawyers who are not transparent or don’t give the litigation process the weight it deserves. If your attorney doesn’t communicate promptly, drop them. Remember that a good lawyer should have excellent communication skills and provide you with frequent and up-to-date reports throughout the process. They should also give you copies of all essential correspondence and pleadings related to the case.