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5 Tips to Prepare Your Business for Litigation

5 Tips to Prepare Your Business for Litigation

Lawsuits are an unfortunate reality of doing business that most businesses have to deal with at some point. Over 90% of all businesses are sued at one point or another during their lifespan, and 43% of small businesses have been threatened with a lawsuit. A successful lawsuit can cost a business hundreds of thousands or even millions of dollars depending on the outcome and type of lawsuit, so it is important that businesses do what they can to prepare for litigation. Effective preparation can help things go smoothly during the litigation process or even prevent a lawsuit from happening in the first place. This blog post will explain five important things your business can do to prepare for a lawsuit before it happens.

1. Document Everything

Written records are critical pieces of evidence during litigation that can sometimes determine the outcome of a lawsuit by themselves. Your business should keep records of any contracts, communications (including electronic communications), financial documents, insurance documents, and even oral agreements and conversations related to your business. During litigation, courts typically order the parties involved in the lawsuit to provide copies of all documented information they have that might be relevant to the case. Keeping thorough records of all these things can help you prove your business acted within the bounds of the law and discredit false claims made against you.

2. Limit Communications

For similar reasons to those listed above, your business should limit unnecessary communications with people both in and outside of your organization when litigation is imminent. Any communications, written or verbal, can be used against you in court if they show evidence of illicit knowledge or misconduct, so your business should try to keep communications to a minimum. Conversations between representatives of your business and employees, contractors, or insurers may become topics of controversy during litigation, so your business should keep oral conversations to a minimum as well to avoid misunderstandings and conflicting memories. And avoid unnecessary communications related to your business.

3. Never Admit Culpability or Fault

Make sure representatives of your business never admit to breaking a law or violating one of your business’ written practices or policies. Records of a statement of this kind could be used as evidence against you during a lawsuit or could even give someone the idea to sue you in the first place. Never admit to someone that your business was at fault for something.

4. Purchase Business Insurance

Business insurance will help cover the costs involved with lawsuits, including both attorney’s fees and damages. Since lawsuits against businesses are so common, you should consider purchasing business insurance to help cover the legal costs associated with them. Insurance can help your business avoid expensive costs that could hinder your business’ growth or even put its survival at risk. Business insurance can help with expensive litigation costs.

5. Hire Legal Counsel Before Legal Issues Arise

Good legal counsel can be invaluable to your business in preparing for litigation. Attorneys familiar with business law and the process of litigation can help your business take effective steps to prepare for lawsuits that may arise in the future. Moreover, attorneys can help your business avoid violating laws and regulations that could give rise to a lawsuit in the first place. An experienced attorney can help your business form a strategy to prepare for litigation and avoid unnecessary lawsuits.
If you are looking to prepare your business for litigation, contact McNeelyLaw today. Our experienced team of Indiana business attorneys can assist you with all of your business needs.

This McNeelyLaw LLP publication should not be construed as legal advice or legal opinion of any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer on any specific legal questions you may have concerning your situation.

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