Whether you own a small business or a large company, it is likely that at some point you will have to deal with at least one lawsuit. If you are faced with litigation, it is essential to be proactive in preparing your side of the case.
Below are a few tips for how you should prepare for potential litigation:
1. Understand your Exposure to Personal Liability
When you established your business, you had to make the decision of whether to form as a corporation, limited liability company (LLC), partnership or sole proprietorship. One of the primary benefits of incorporating your business is the separation of liability it provides between the company and the business owner. In other words, your personal assets are protected by a “corporate veil” if the company is sued. In contrast, a sole proprietor has a much more difficult time establishing separation between the company and the owner’s assets, which places the business owner’s personal property at risk in a lawsuit against the business.
2. Preserve Evidence
If you anticipate a lawsuit against your company, it is important to stop the destruction of any documents relevant to the potential lawsuit. If your company commonly shreds documents or routinely deletes data from your computers, inform them that they must preserve all information that is related to the lawsuit. The court can impose a penalty against your business if evidence related to the case is destroyed.
3. Review Your Insurance
Confer with your attorney, but you should also consider the various insurance products to determine what will benefit your business the most. For example, you should review your workers’ compensation policy, your
general liability policy,your employment practices liability policy and any other insurance to determine what type of protection may be available.
4. Retain an Attorney
Most business owners have conferred with a lawyer while forming their company, but that lawyer may not be the best person to represent you during litigation. You should work with an experienced business litigation attorney who can provide advice and guidance in preparing for the potential litigation possibilities. Working with a lawyer early in the process can save you significant time and money.
With over 36 years of experience providing sophisticated legal advice on corporate matters and related litigation, Mailly Law is here to help. With our structure, you work with the same attorney who gets to know your culture and anticipates your legal needs. Contact us today to schedule your initial consultation.