What is a defendant?
This refers to the party that is sued in a lawsuit. The person or entity doing the suing is the plaintiff.
In a lawsuit, the defendant – also known as the "respondent" – is the person accused of a "civil wrong," such as a breach of contract, by the plaintiff. Usually, defendants are people or businesses, but they can even be objects, as in the 1916 case United States v. Forty Barrels and Twenty Kegs of Coca-Cola. In this infamous lawsuit, the U.S. government tried to force The Coca-Cola Company to remove caffeine from its products. However, the food itself was the subject of the case after the government seized the barrels and kegs in 1909.
But those cases are few and far between. Most of the time, defendants are real-life people or businesses, and far too often, they happen to be small businesses.
When does a business become a defendant?
As soon as a business is named in a lawsuit brought by another person or entity, the business is a defendant. Your business could be a defendant even if it does nothing wrong. Frivolous lawsuits are nothing new in this country (as evidenced by the Forty Barrels suit), which means a third party may try to sue you even if they don’t have much legal ground to stand on.
That’s bad news for small-business owners, considering:
- Even frivolous lawsuits cost $2,000 to $5,000 in legal defense costs.
- Lawsuits can hurt your reputation.
- Lawsuits are time-consuming and stressful even if they are ultimately thrown out.
The good news is that with adequate liability insurance, your insurance provider can pay for your legal expenses when you're sued, even if the suit is meritless. That spares you from paying lawyers’ fees, settlements or judgments, and other court costs out of pocket.
To start protecting your business today, apply for coverage through Insureon.
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