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What to do if your small business gets sued

July 02, 2021

Posted in Blog

What to do if your small business gets sued and how to reduce the thread

Small business owners will most likely face the threat of a lawsuit at least once over the life of their business, and the financial impact can be devastating. Business owners must understand the importance of having a good business lawyer by their side.

Small businesses are sued for various reasons, but the most common ones are employees and customers.


According to a Hiscox study, nearly one out of five small businesses will face employee litigation. Employees usually sue because of:

  • Wage and salary violations
  • Workplace harassment
  • Workplace discrimination law
  • Employee injury as a result of employer negligence
  • Wrongful termination

CustomersWhat to do if your small business gets sued

  • Not receiving the product that was promised
  • Customers may sue for a wide range of reasons:
  • Discrimination
  • Having a hidden camera in the bathroom
  • Personal injury on-premises
  • Refusal of service claims

Business owners can do several things to reduce the threat of a lawsuit, such as minimize the financial perils, be careful what you say and do (to both customers and employees), work with a competent business lawyer.

If you get sued, make sure you take the following steps to improve the outcome for your business. First of all, call your lawyer right away. Your lawyer will give you the best course of action for either deflating the situation or ensuring you handle it properly. Second, collect information, make sure you keep complete records about the person or entity threatening to sue and the situation at hand. In case of having an insurer, contact it. And last but not least, make sure you stay calm.

Call us now for a Strategy Session. We can talk about how we can help you to run your business without worrying about unexpected lawsuits. We can be reached at (714) 415-2007 or reserve your spot by clicking here.