What Business Owners Should Know About Premises Liability
Do you want the good news or the bad news first?
To business owners, the world can sometimes seem like one big lawsuit waiting to happen. Business owners (and their insurance carriers) looking for consolation may not find it in the area of tort law.
The law is rather ambiguous on many important points. In fact, the term “premises liability” says a lot. The term implies that liability may be imposed simply because an injury victim was hurt on your premises. In addition, many business owners are familiar with the fact that being a business can actually increase the exposure. Since the injury victim may be in a special category as a “business invitee,” the premises owner may have a higher duty to protect.
The good news is that the term “premises liability” is somewhat misleading. Business owners are not liable for “positional risks,” i.e. simply because of where the accident happened. Under Virginia law, the analysis is fault-based. Lawyers and insurance companies ask questions beyond simply where the accident occurred. Was the hazard open and obvious? Was it preventable? Were there warnings? Were the warnings reasonably calculated to prevent the accident? These are the kinds of questions that must be analyzed before an assessment of liability can be made.
This is why we now call this field “risk management.” Risk management does not simply look at black and white questions like liability. It understands that risks are always present and lawsuits can always be filed. The more important question is how to manage risk.
Insurance carriers and their underwriters frequently have programs which offer to inspect business premises to limit risk. Experts like fire cause and origin engineers, have building code experts and slip and fall consultants may be engaged free of charge to do an inspection.
While the risk of a lawsuit can never be entirely eliminated, with ordinary care and expert consultation, the possibility of an injury and catastrophic lawsuit can be carefully managed.