Avoiding Personal Injury Lawsuits and Liability
Protect yourself from risks that may hurt your small business.

By Amy Gulinson

In today’s litigious society, many business owners are concerned with ways to avoid liability in connection with business operations.

Reducing the chances of personal injury lawsuits and limiting liability is a function of adequate risk management.

The first step in minimizing personal injury liability is to identify the risks that may apply to your small business. Soliciting input from key partners and employees, or brainstorming with a cross-section of employees from various operations can help identify situations that could create liability.

Areas of Concern
While it is not possible to identify every potential risk or situation, this process will help you put safeguards in place to limit such exposure. Here are some examples of small business operations and potential areas of concern for personal injury liability:

Retail Stores: In almost all cases involving retail businesses, the main concern for small business owners is the proverbial “slip-and-fall” liability. A customer walks into a store and is injured when falling on the premises. The customer then brings a lawsuit against the small business and the owner. Other areas of concern may be the serving temperature of foods or drinks, or placement of fixtures or products that may fall onto a customer or a child who is not being properly supervised.

Construction Industry: Construction and improvement-related industries generally have a more difficult task when it comes to determining personal injury liabilities, because construction or work sites are inherently dangerous and difficult to monitor and control. Areas of concern include injuries to both employees and third parties, such as inspectors, engineers and apprasiers. Though it may not seem right,  injuries to vandals or trespassers when the site is closed can also present liability issues.

Animal-related Businesses: Generally the main concern in these industries is the inherent dangerous nature of the animals themselves, whether they are horses, dogs, rabbits or hamsters. When providing services or selling these animals, one concern is the harm an animal may cause to either an employee or a customer.

Delivery Services: Many companies take their product or service to the customer (i.e., copy services, food delivery services and information technology services). A primary concern for these businesses is traffic accidents involving, or caused by, their employees.

These are some of the generic and more obvious areas of concern for personal injury liability in connection with small businesses. Your employees and people close to your particular industry will be able to help generate a list of potential risks for your particular business.

All notes taken in connection with such a meeting should be labeled “Work Product.” If at all possible, have your attorney present in order to protect and provide for the privileged nature of the information discussed to avoid it being discoverable in the event of a lawsuit.

Limiting Exposure
After identifying potential risks for your particular small business, it is important to implement procedures and practices to avoid or minimize your exposure in the event personal injury occurs. The following is a list of some procedures and practices that can limit personal injury exposure:

Have procedures in place for reporting and cleaning or eliminating hazardous conditions, whether a slippery floor from spills, rain or snow, or other hazards such as boxes lying on the floor, fixtures not properly locked in place or burned-out lightbulbs that make it difficult to see. Make sure your employees know  to report the hazard to someone at the management level, take precautions to alert customers to the hazard with cones or caution signs, and act in a reasonable and expeditious manner to eliminate the hazardous condition.

Keep the premises, parking lots, equipment and machinery, and all areas used by you, your business and employees in good order and repair.

Post warning signs and alert third parties to hazards, putting them on notice of hazardous conditions, and that they enter and/or engage in provided services at their own risk.
Place lockable fences around dangerous work sites or conditions, and avoid leaving keys in machinery or equipment. Consider hiring security personnel to monitor the work site after hours.

Require all third parties to be escorted by a construction manager while on work sites.

Require supervision when customers or third parties handle animals, and post statutory warning signs in connection with equine activities.

Train employees in connection with all policies and procedures.

Consider using independently contracted drivers as opposed to employees for delivery services.

These are just some steps that can be taken to limit your exposure to personal injury liability. While you can reduce the risk by implementing procedures and practices,  you cannot foresee every personal injury situation.

Additional Considerations
For further protection, consider these additional suggestions:

Make sure the corporate entity you have chosen is properly formed to limit your personal liability, and if you are a sole proprietor, consider forming a corporate entity such as a limited liability company.

Have an attorney review and explain your insurance coverages and exemptions and, if necessary, speak with your insurance provider about changes or additional coverages available.

Speak to an attorney about statutory laws that may limit your liability or cap your liability in the event of personal injury, and spend the money to ensure you are in compliance with such laws.

Copyright © 2002 by Amy M. Gulinson, Esq.

Amy Gulinson is an attorney with Husch & Eppenberger, LLC, in the firm’s general Corporate and Business Transactions Group. She can be reached at (816) 421-4800.

This article provides general coverage of its subject area. It is provided free, with the understanding that the author, publisher and/or publication does not intend this article to be viewed as rendering legal advice or service. If legal advice is sought or required, the services of a competent professional licensed in your state should be sought.