How Contractors Should Handle Lawsuits

Getting sued is serious, not the end. Karalynn and Jess explain the first steps contractors must take after being served, from protecting answer deadlines and preserving evidence to understanding insurance, personal liability, discovery, and the real cost of defending a construction lawsuit. Learn more about The Cromeens Law Firm here ! Grab Karalynn's new book Trust Your Gut here . Follow Karalynn Cromeens on Facebook here . Follow Karalynn Cromeens on Instagram here . Follow Karalynn Cromeens on LinkedIn here . Watch the show on YouTube here . Key Takeaways 1. Take a breath, but do not ignore a demand letter or lawsuit because failing to file an answer can hand the other side a default judgment without a fight. 2. Gather contracts, change orders, emails, texts, photos, daily reports, and job records immediately because documentation created during the project is the strongest evidence in a dispute. 3. Residential contractors may have defenses when an owner sues without first providing notice of alleged defects and a proper opportunity to cure. 4. Failing to maintain your business entity or improperly spending construction trust funds can expose you to personal liability beyond the company itself. 5. Insurance may provide a defense for negligence claims, but the carrier controls settlement decisions and litigation can still require difficult business choices, experts, and substantial legal work. Timestamped Overview 00:02 Intro to contractor lawsuits 00:34 First steps after being served 00:43 Why you must not ignore a lawsuit 01:17 Demand letters and early response 01:50 Residential defect notices and opportunity to cure 02:40 Answer deadlines and Justice Court timing 03:27 Default judgments and collection risks 04:03 When contractors can face personal liability 05:44 Why no written contract creates an expensive dispute 06:14 Using texts, emails, and photos as evidence 06:28 Daily documentation and jobsite photos 07:06 Never destroy emails, texts, or project records 08:27 The risk of being sued years after project completion 08:59 What general liability insurance actually covers 09:40 Negligence claims and insurance defense decisions 10:56 Storage-unit foundation case and insurance settlement 12:41 Why insurance does not extend your answer deadline 13:31 Why you need a construction attorney quickly 14:27 When to speak with the o