When the big companies get sued, do they lose potential profits from the business or is the money?
already saved up and put aside in case the situation arises?
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The answer to your question is “that depends”. Unless a company is in horrible shape, it will always have some cash reserves. How much depends on the size of the company and it’s financial health. For large companies it’s usually in the tens to hundreds of millions but can easily be in the billions for cash-rich companies.
The money is not set aside just in case they get sued…it’s there to run the business. However, if a situation came up where it was needed for that then obviously it could be used to pay-off a lawsuit. For small suits by individuals a company will typically just pay it directly. For large suits like a class action, the payment can be in the hundreds of millions or even billions. The advantage there is that these types of suits usually take years to resolve so most companies will start to build their cash reserves just in case they lose. Also, many of the suits are settled with deals that may also involve stock exchanges in addition to a cash payout so they may not have to have the full amount in cash.
Regardless of how it is settled, a company is always losing money if they have to pay a lawsuit since it’s either cash from the bottom line or issuance of stock they hold.
Money is money, it comes from somewhere
With that said any probable future loss situation will have a contingency fund appropriated in case it does happen
While there might be a small reserve fund to settle trivial lawsuits most companies do not have money set aside to settle a big lawsuit. Because it takes years from when a suit is filed until it goes to court companies begin to set aside money to cover what they might lose and that money gets declared as reserves instead of profit on their financial statement. If they end up not having to pay as much as they set aside that money then gets declared as profit.