If you’re a business owner or manager, the specter of liability looms large in your considerations. Whether it’s errors and omissions or negligence, the potential for liability claims can be a significant source of concern. In this post, we’ll explore various defenses against liability claims that business owners and managers should be aware of. It’s important to note that while we are not attorneys or insurance claims advisors, the information provided here serves as a general guide to help you navigate liability concerns in collaboration with your legal and insurance professionals.
Defenses Against Negligence Claims:
- Last Clear Chance: A crucial defense against negligence claims involves the concept of the last clear chance. This refers to the final opportunity for the plaintiff to avoid loss or damage. If the plaintiff fails to act and their actions are the cause of the damage, it could serve as a defense, though its applicability varies among states.
- Contributory Negligence vs. Comparative Negligence: Contributory negligence, although less common today, was historically a defense where damages were barred if the plaintiff contributed in any way to their loss. Comparative negligence, now more widely recognized, assesses the proportionate amount of negligence contributed by all parties involved. Damages may be reduced based on the plaintiff’s level of contribution.
- Assumption of Risk: This defense requires the defendant to prove that the plaintiff understood and willingly accepted the risks involved. Industries with inherent risks, like skiing or skydiving, often rely on this defense. Clarity in terms and conditions or waivers is essential to establish assumption of risk.
Liability Without Negligence:
- Strict Liability: Courts can recognize forms of liability without the need for the plaintiff to establish negligence. Strict liability may be applied in cases involving hazardous activities or materials. For example, a company handling dangerous materials may face absolute liability if something goes wrong, irrespective of negligence.
- Imputed or Vicarious Liability: This form of liability holds another party responsible for the actions of a negligent party. Employers are commonly held liable for the actions of their employees under vicarious liability. Understanding and addressing potential hazards associated with employee actions is crucial for businesses.
As a business owner, it’s imperative to be proactive in identifying potential risks and securing the right coverage. Working closely with your insurance agent or broker is essential to tailor coverage that addresses the specific risks associated with your business activities. Whether leveraging defenses against negligence claims or understanding liability without negligence, a comprehensive risk management strategy is key to safeguarding your business from the uncertainties that may arise.