The Expert Podcast

If you are a business owner or manager, you might be interested in liability protection and know what the defenses against liability claims are when it comes to business risk liability. Whether it's errors and emissions or negligence, it is one of the biggest concerns. There are a lot of defenses that you may have against liability claims. Now remember, we're not attorneys, we're not giving you legal advice, and although we are an insurance agency, we're not giving you insurance claims advice. This is just general information that you might want to know about and work out with your insurance carrier or with your insurance agent. But these are things to be aware of when you're placing coverage and also operating your business.

First of all, when it comes to defenses against negligence claims, you can argue that the plaintiff, meaning the person that would be claiming against you, has some responsibilities to avoid that loss. One of them is called the last clear chance. That's a final opportunity to avoid the loss or damage if the plaintiff fails to act or cause the damage themselves, and if it's not the breach of your duty, your emission, or your mission, then that might be a defense against it. Some states allow this, some don't, and of course, an attorney would do this, but make sure that if you're involved in a potential activity or occurrence that could cause a claim that you're looking for that point of having the last clear chance. That's a phrase that's often used in the legal industry.

Also, there's a theory called contributory negligence. It was a defense that used to be used a lot, but now it's been replaced with comparative negligence, but a few jurisdictions still recognize this defense. Under contributory negligence, if the plaintiff is found to have in any way contributed to the loss that they incurred or damages, no damages can be awarded to them. Comparative negligence, on the other hand, weighs the proportionate amount of negligence contributed by all the parties. So, how much did the plaintiff contribute? How much did you contribute? So if the plaintiff finds they have contributed to the damage, the damage is not dismissed, but it may be reduced by the amount that they contributed to their own loss or damage.

In some cases, a defense is the assumption of risk. A defendant has to prove that the plaintiff understood the risk involved. For example, if they're in a risky industry or a risky activity like skiing, snowboarding, or skydiving, sometimes the plaintiff is said to have assumed the risk and not held somebody else liable because they were harmed. And again, that's a legal determination, and usually good terms and conditions or waivers include that.

However, on the other side, you may actually be a business that has liability without negligence. There are forms of liability recognized by courts without the necessity for the plaintiff to establish negligence. For example, a court may award damages based on strict liability. That is an example where a business is doing something hazardous to begin with. For example, handling dangerous materials. If you're a company that transports dynamite, you may have absolute liability if anything goes wrong. You knew what you were doing was dangerous. Strict liability usually comes from product defects. It's a term first used back in the 1960s, and it is something where you may have liability for materials, products, or goods that you produce, and if a product defect causes damage or injury, that can establish liability without the fact that there was any negligence just in the way the product was produced.
Then you have imputed or vicarious liability. That's where another party is held responsible for the negligent party's action. For example, an employer is usually held liable for the actions of their employees under vicarious liability. So if you're a business and you're looking at what your potential hazards or risks are, these are the types of perils you want to consider, and make sure that your general liability Eno policy, whatever you're putting in place, considers those if you want them to be covered. Make sure you work with your agent or broker to get the right kind of coverage for your business. It includes the potential for different types of risks, mitigates those, reduces them ahead of time, and has good coverage in case something goes wrong.