Small businesses are not immune to the risks of lawsuits and personal injury claims. Most small businesses, especially if they have frequent customers and employees, will face a personal injury case during their lifetime.
And insurance helps a small business offset the potential liability risks and monetary loss from liability claims.
Personal injury laws that every small business must know and safeguard against include:
1. Vicarious Liability – Protection Against Employee Actions
The employees you hire may not act in the best interest of your company at all times. Incidents can and do happen, and you’ll be held liable in what’s called vicarious liability. This is a legal term, which means:
- An employer is liable for the acts of their employee
The acts of the employee must occur during their time with the company, and all claims must prove that the employee’s actions took place during their employment with the company. You, as an employer, are liable for a range of actions of your employees, including:
- Copyright breaches
And several other actions. Third parties may also fall under this spectrum if they are deemed under the control of the employer. As an employer you must:
- Properly train employees
- Provide guidelines and policies to protect against vicarious liability
You can provide training for discrimination, bullying, harassment and other actions which may be deemed vicarious liability.
2. Premises Liability: Injuries Occurring on Your Business’ Property
Premises liability is when a person, a customer or employee, is injured on your business’s premises. Property owners are held liable for injuries and accidents on their property. There is a legal responsibility of the business owner to protect patrons and employees against injury.
But this may vary depending on the status of the injured party.
A trespasser who is injured while trying to rob a warehouse would be held at a different status than an employee who had a roof tile fall on him or her. If a person is invited on the property, that is, they are on the property for a business purpose and become injured, you may be held liable.
Employers have a duty to:
- Make necessary repairs.
- Protect against known hazards.
- Reasonably inspect for unknown dangers.
States have their own laws in place to further protect invitees suffering injuries on a business’s premise. Colorado Premises Liability Law “makes landowners and those who exercise sufficient control of the property, such as business tenants responsible for activities and conditions on the property.”
Negligence can be proven when the owner knew of the dangers and hazards without taking the appropriate measures to correct the problem.
3. Product Liability: Potential Ongoing Hazards and Risks
Product liability is very complex, and a person who is injured is often advised to file a lawsuit against every party along the supply chain. If you manufacture a product or manufacture components of another good, you may be held liable for product liability.
Even wholesalers or retail stores are held liable in product liability claims.
There can be:
- Design defects
- Manufacturing defects
The law follows res ipsa loquitur, which places the burden of proof on the defendant in some cases. When this doctrine is invoked, it means that the issue wouldn’t exist without some form of negligence.
Strict liability can also be applied.
Marketing defects, such as improper labeling, can also lead to product liability claims. Product liability can be very expensive, and it will include everyone along the supply chain so that the plaintiff can seek restoration.
Small businesses are at risk of personal injury claims, whether they occur on the premises of the business, during product usage or even if an employee acts inappropriately. A thorough understanding of the law and your duties as a business owner can lower your risk of personal injury claims.