What to Do if Your Business is Accused of Malpractice

Whether filed by a client, vendor or another business, a malpractice lawsuit against your company will likely be a heavy expense, whether you win or lose. It’s normal to feel overwhelmed and upset, however, if you want to keep your business afloat and protect its reputation, it’s important to handle the process carefully.

Speak with an Attorney

First, review suit papers with an experienced business or malpractice lawyer. Ensure that it contains the proper entity associated with the issues. If this information is incorrect, you may be able to dismiss the case. 

Put a preservation order in place to hold the case for a thorough review of the allegations. It’s crucial that you preserve all records with relation to the case, such as documents and electronic material (email and web pages, photos, videos and voice messages). 

Craft Your Response Carefully

Be sure to understand the nature of the claims and the potential liability and exposure to your business to make a decision on how to proceed. Discuss your response with your attorney before sending it to be certain everything is properly addressed. Keep in mind that failure to respond within the allotted time frame allows the plaintiff the right to file a request for default, meaning they will win the case.

Your response should include the following items:

  • Admittance or denial of each allegation.
  • Your defenses and counter/cross-claims against the plaintiff or other defendants.
  • Whether you want a jury trial or an alternative resolution (e.g., an out-of-court settlement).

Communicate Wisely with the Plaintiff

Anything you say regarding the lawsuit can be used against you, so do not attempt to contact the plaintiff before you’ve thoroughly reviewed the suit. Once a lawsuit has been filed, you should not communicate with the plaintiff at all. Talking things out to resolve issues ended when they filed suit. All communications with the opposing side should be conducted through your law firm and the plaintiff’s.

Inform Your Insurance Provider

New Mexico legal malpractice insurance exists to protect you in the event of a lawsuit. Find out approximately how much it will cost you to both defend yourself and pay the ultimate judgment should you lose the case. The lawsuit papers should be forwarded to the insurer in a prompt manner to preserve coverage. Your New Mexico legal malpractice insurance will reflect resolution options.

Best Practices During and After the Case

The litigation process can be long and stressful. Here is some advice to ease the process:

  • Be upfront and honest with your lawyer about the facts from the start. It is better for your lawyer to be prepared than to be caught by surprise.
  • Promptly reach out to your New Mexico legal malpractice insurance provider and review the attorney’s invoices immediately.
  • Try to put aside feelings of anger or pride. You still have a business to keep alive.
  • Implement proactive steps to create an HR foundation. Create or update your handbook on anti-harassment/anti-discrimination, detailed complaint procedures; and management training on high-risk areas (interviewing, discipline, and terminations). 

About Daniels Insurance, Inc.

At Daniels Insurance, Inc., we have a unique understanding of the risks that people like you face on a regular basis. With the backing of our comprehensive coverages and our dedication to customer service and quick claims resolution, your business will be fully protected. For more information, contact us today at (855) 565-7616.