Getting sued is every business owner’s nightmare. One day, you’re managing clients and employees, and the next, you’re holding a formal complaint, wondering what steps to take.
Don’t panic. While facing a lawsuit can be overwhelming, how you respond can make all the difference in protecting your business, finances, and reputation.
Whether you’ve received a demand letter or a formal complaint, this guide walks you through the essential steps to take when your business is sued—and how to avoid common mistakes that could cost you big.
Step 1: Recognize the Early Warning Signs — The Demand Letter
Before you’re officially sued, you’ll often receive a demand letter.
A demand letter is a formal notice from an attorney or individual that outlines a grievance and demands corrective action—whether it’s paying a sum of money, fixing an alleged issue, or fulfilling a contractual obligation.
Key Characteristics of a Demand Letter:
- It’s not a lawsuit but can signal legal action if ignored.
- Includes a deadline for a response.
- Often outlines the issue and the desired resolution.
💡 Why It Matters: Many lawsuits can be avoided by responding strategically to a demand letter. Consulting a lawyer early can help you negotiate a settlement or prove that the claim is invalid—before it escalates into court.
💼 What to Do When You Receive a Demand Letter:
- Don’t ignore it. Failing to respond could lead directly to a lawsuit.
- Contact your business attorney immediately. They can assess the legitimacy of the claim and advise on your options.
- Gather relevant documents (contracts, receipts, emails) that relate to the issue.
- Avoid direct communication with the sender until you’ve consulted your lawyer.
Step 2: If You’re Officially Sued — Respond to the Summons Promptly
If you couldn’t resolve the issue or didn’t respond to the demand letter, the next step is often a formal complaint.
You’ll receive two key documents:
- The Complaint: Details the plaintiff’s allegations and what they’re seeking (e.g., monetary damages, contractual enforcement).
- The Summons: A legal notice informing you that you’re being sued, which includes the court information and a deadline for response (usually 20–30 days).
How Will You Be Served?
- In-person by a process server or sheriff.
- By certified mail.
- Through your registered agent for service of process (the official contact listed for legal documents).
💡 Ignoring the summons is the worst thing you can do. Failing to respond can result in a default judgment, where the court automatically sides with the plaintiff—leaving you responsible for all damages sought.
Step 3: Build Your Defense — With the Right Legal Help
Time is critical. The sooner you loop in a business litigation attorney, the better your chances of mounting a strong defense.
What Your Attorney Will Do:
- Review the complaint and explain the legal claims against you.
- Assess your options:
- File a formal response (called an “answer”).
- Negotiate a settlement if it’s in your best interest.
- Prepare for trial if necessary.
- Identify potential defenses, such as:
- Breach of contract by the plaintiff.
- Fraudulent claims.
- Improper service of process.
💡 If you’re based in Florida, working with an experienced Orlando business litigation attorney ensures you’re represented by someone who understands the local court system and state laws.
Step 4: Avoid These Common Mistakes After Being Sued
When panic sets in, business owners often make critical errors. Here’s what NOT to do:
❌ Don’t contact the opposing party directly.
Even if you want to “work things out,” doing so could harm your case. Always go through your attorney.
❌ Don’t discuss the lawsuit publicly.
Avoid posting about the case on social media or discussing it with employees, vendors, or customers. Anything you say could be used against you.
❌ Don’t ignore deadlines.
Legal timelines are strict. Failing to respond on time can lead to an automatic loss.
❌ Don’t destroy or alter documents.
Even if certain records seem damaging, tampering with evidence can lead to serious legal consequences.
Step 5: Check Your Insurance Coverage — It Might Help
Many business owners don’t realize that their insurance might cover legal fees or settlements.
Insurance policies to review:
- General Liability Insurance: Covers third-party bodily injury, property damage, and some legal costs.
- Professional Liability Insurance (Errors & Omissions): Useful for service-based businesses sued for mistakes or negligence.
- Employment Practices Liability Insurance: Covers employee-related claims (e.g., discrimination, wrongful termination).
💡 Tip: Some business owners may also have coverage through trade associations, landlords, or specific vendor agreements. Check all active and past policies and consult your lawyer and insurance agent.
Step 6: Consider Alternative Dispute Resolution (ADR)
Not all lawsuits go to court. Many can be resolved through less costly methods like:
- Mediation: A neutral third party helps both sides negotiate a mutually acceptable resolution.
- Arbitration: Similar to court but less formal. The arbitrator makes a binding decision after hearing both sides.
Advantages of ADR:
- Faster than going to trial.
- Often less expensive.
- Keeps disputes private, avoiding public court records.
💡 When is ADR a good idea? If the opposing party is open to compromise or if the potential cost of litigation outweighs the benefits of fighting it in court.
Step 7: Protect Your Business Moving Forward
Once the lawsuit is resolved, take steps to reduce future legal risks:
- Review contracts carefully before signing.
- Keep thorough documentation of all business dealings.
- Invest in appropriate insurance coverage.
- Establish clear employee policies to avoid workplace disputes.
- Work with a business attorney regularly to ensure ongoing compliance.
Final Thoughts: Don’t Navigate a Lawsuit Alone
Facing a lawsuit can be stressful, but you don’t have to handle it alone. The right legal team can guide you through the process, help you avoid costly mistakes, and work toward the best possible outcome for your business.
If your business has been sued or you’ve received a demand letter, contact our Orlando business litigation attorneys today. We’ll help you protect your company, minimize risks, and plan for a stronger future.
❓ FAQs About Business Lawsuits
Q1: What should I do immediately after being served a lawsuit?
Contact your business attorney right away. Avoid discussing the case with others and gather all relevant documents to help your lawyer build your defense.
Q2: What happens if I ignore a demand letter?
Ignoring a demand letter could lead to a formal lawsuit. While it’s not a legal requirement to respond, consulting an attorney can help you avoid escalation.
Q3: How long do I have to respond to a lawsuit?
You typically have 20–30 days from when you’re served to file a formal response. Ignoring this deadline can result in a default judgment against your business.
Q4: Can my business insurance cover legal costs?
In many cases, yes. Policies like general liability or professional liability insurance often cover legal fees and settlements, but it’s important to review your policy details with your attorney and insurance agent.
Q5: What’s the difference between mediation and arbitration?
Both are alternatives to court. Mediation helps both parties negotiate a voluntary agreement, while arbitration involves a binding decision made by an arbitrator.
Q6: How can a business litigation attorney help?
An attorney helps you navigate the legal process, respond to complaints, build a defense, and explore settlement or ADR options. Their expertise can make the difference between winning and losing your case.
The attorneys at The Orlando Law Group help all types of legal issues for non-profit organizations in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida.
Whether it is on this issue or one of the thousands of other issues facing non-profit organizations, The Orlando Law Group can help.
If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.
The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.
Last Updated on February 21, 2025 by The Orlando Law Group
