How Business Owners Can Avoid Premises Liability Lawsuits

Written by

Charles R. Gueli, Esq.

Charles R. Gueli, Esq.

Licensed Attorney

Charles is a practicing attorney with over 20 years of experience in personal injury law. He was recently selected as a SuperLawyer by Thomson Reuters, an exclusive honor awarded to the top 5% of attorneys.

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Know the most common reasons for premises liability lawsuits and how to reduce your risk as a business owner. Get easy tips to prevent costly accidents.

Can your business survive a premises liability claim? Customer injury claims cost an average of $30,000 per claim, and business vehicle accidents average $45,000.¹

We live in a litigious society, and you can’t stop someone from filing a lawsuit. However, you can reduce your company’s exposure to injury claims and lawsuits.

By understanding the basic elements of premises liability, and developing common-sense procedures to prevent hazards, you can mitigate some of your company’s financial risk from premises liability cases.

Business Negligence and Liability

Premises liability is a legal doctrine applying to business and property owners. Under this doctrine, a business owner can be held liable, meaning legally responsible, for accidents and injuries which occur on their property, so long as the business owner was negligent.

There are four elements necessary for a customer to establish liability:

1. Duty of Care: Premises liability begins with the legal “duty of care” you have as a business owner to do everything reasonably possible to assure your property is safe, and that your customers, patrons, clients, employees, and others legally upon your property are safe from undue harm and injury.
2. Breach of Duty: To succeed in a liability claim, the injured party must show you knew or should have known there was a hazardous condition on your property that was likely to cause injuries, and you failed to repair or eliminate that hazard. You breached your duty of care by failing to protect others from preventable harm.
3. Direct and Proximate Cause: Your negligence becomes the direct and proximate cause of a person’s injuries. Direct and proximate cause means there were no other intervening factors, other than your negligence, which could have caused the injuries.
4. Damages: The injured person has verified damages typically including medical expenses, lost wages, and pain and suffering.

Understanding Reasonableness

Your legal duty of care is a reasonable obligation. This means as a business owner you aren’t required to take extraordinary measures to keep the property safe. Instead, you are only required to take reasonable steps to make your property safe.

For example, a restaurant owner would not be under a legal duty of care to have multiple employees continuously follow around every customer in the restaurant to clean up every drop of spilled liquid, or every piece of dropped food.

However, the same restaurant owner would have a legal duty to keep the floor free from hazards, and may have employees monitor the floor for spills at regular intervals, particularly during peak business hours.

Common Types of Personal Injury Claims

As a business owner, your legal duty of care extends to just about anyone who comes onto your property. Legally, people are grouped into “classes” according to their reason for visiting your business location.

Legal Classes of Visitors to Your Business

Invitee: An invitee is a person who enters your premises at your express invitation or the invitation of an employee. The invitation does not have to be in writing. The invitee enters your property for your mutual benefit. Invitees include customers, contractors, and more. Your employees are included in the invitee class because your relationship is mutually beneficial.

Licensee: A licensee is a guest for personal, rather than business or commercial purposes. For example, a social guest at your home would be a licensee. When it comes to businesses, those who enter the property are almost always Invitees, not Licensees.

Trespasser: Trespassers are persons who enter your property without being asked, and are normally in violation of local trespassing laws. A burglar would be a trespasser. So is a customer who refuses to leave when asked.

As a business owner, you have no legal duty to keep your property in a safe condition for trespassers. However, you aren’t allowed to purposely cause harm to trespassers.

For example, you can’t set traps that would injure a burglar, and if you are aware of trespassers, you’re obligated to warn them of dangerous conditions. Just as in a private residence, you can only use deadly force in defense of your life or another’s. Deadly force is never legally justified to protect property.

Common Causes of Injury Claims

Here are some of the most common reasons for premises liability claims against business owners.

Slippery hard surfaces: Spills, rain, snow or ice carried into the building, waxed floors, wet floors from mopping, and other slippery floor conditions are common causes of slip and fall accidents.

Faulty stairs and escalators: Broken banisters, slippery steps, and mechanical failures are leading causes of stairwell and escalator accidents.

Falling merchandise or inventory: Falling objects are a common cause of employee injuries, as well as customers.

Physical obstacles: Poorly placed electrical cords, protruding furniture, floor mats, floor door moldings, door stops, fallen merchandise, and other obstacles must be promptly eliminated or repaired.

Inadequate lighting: Inadequate lighting can hide multiple hazards inside and outside of your business, including curbs, physical obstructions, steps, potholes, and even criminals set on robbing your customers.

Parking lots: Parking lots and parking garages are common locations for pedestrian injuries due to concrete car stops, potholes, misdirected cars due to faded pavement arrows, uneven pavement, poor signage, ongoing construction, and criminal activity.

Sidewalks: Broken, cracked, uneven, or buckled sidewalks are a menace to pedestrians. You aren’t normally responsible for the maintenance of state, county, city, village, or other government-controlled sidewalks. In some places, the maintenance of sidewalks is shared between the government entity and the business owner. It’s important to know when you’re responsible for the maintenance of sidewalks adjacent to your business.

Ice and snow: Business owners are responsible for clearing and de-icing walkways and parking lots owned or controlled by the business. Most businesses are also responsible for clearing public walkways adjacent to the business.

Food poisoning: Customers may be sickened due to poor food handling or storage, or the transmission of disease from food-service employees.

General Loss Mitigation Procedures

Good business practices, including employee training, will reduce your liability exposure for slip and fall accidents, and most other kinds of premises liability risks.

Reasonable business safety procedures might include:

• Immediately repair or remove hazards as soon as they are known
• Take all safety precautions with swimming pools
• Avoid using extension cords in public areas
• Have proper trash containers that are emptied often to avoid overflow
• Maintain flooring, restrooms, aisles, fitting rooms, shelving, and walkways at regular intervals
• Use industry-standard cleaning products
• Regularly inspect and maintain elevators and escalators
• Implement adequate security measures, particularly in areas known for criminal activity. Measures may include surveillance cameras, increased lighting in parking areas, and hiring security personnel.
• Regular maintenance of outdoor areas, including sidewalks, children’s play areas, parking lots, and lighting
• Conduct periodic inspections for unsafe conditions

Loss mitigation requires good management:

• Learn about premises liability laws applicable to your business
• Periodic employee training regarding safety measures and reporting of hazardous conditions
• Employee training for assisting ill or injured customers, including basic first-aid
• If you have an Automated External Defibrillator (AED) on site, be sure employees know how to use it
• Keep up-to-date maintenance records, including actions taken to remove and repair hazardous conditions
• Maintain records of all government inspections and reports
• Purchase worker’s compensation insurance as required
• Invest in an adequate premises liability insurance policy

Preventing Slip and Fall Accidents

Slip and fall accidents are the most common reason for emergency room visits in the community and are a leading cause of workplace injuries.

Implementing procedures for preventing common causes of trips, slips, and falls will significantly mitigate potential losses. Keep in mind that a well-documented practice of reasonable precautions is a strong defense against allegations of negligence.

Reasonable precautions include:

• Clean up spills as soon as they occur
• Replace unsafe flooring, install mats and add abrasive strips
• Mark spills with warning signs
• Mop or sweep up debris from floors
• Remove obstacles from walkways
• Secure mats and carpets with tape to ensure they remain flat
• Close cabinets or drawers when not in use
• Keep workplaces and walkways well-lit
• Replace burned-out light bulbs and faulty switches
• Ensure employees are wearing appropriate footwear

6 Things To Do When an Incident Occurs

You should have clear policies and procedures in place for managing injuries occurring on your premises, whether to a visitor or an employee.

What you or your employees do and say after an incident will have a big impact on any subsequent injury claims made against the company.

1. Offer Medical Attention

Administer first aid. If the injury appears serious, or the injured person or their companion asks for emergency medical services, do not hesitate to call an ambulance.

Notify police for incidents involving physical assault, rape, or vehicle accidents such as a pedestrian hit in the parking lot.

Assist employees in calling for help. Post emergency information cards near every telephone in your business with phone numbers for emergency services (including any numbers that must be dialed to reach an outside line) and the street address for the building.

2. Gather Documentation

Use an Incident Report Form to gather the full name, address, phone numbers, and other contact information of the injured party and any witnesses, and to document the date, time, and circumstances of the incident.

You can use this sample Slip and Fall Incident Report form to document the event.

3. Secure Photographic Evidence

Preserve any footage captured by your surveillance or security cameras leading up to and including the incident. You can take photographs of the location where the incident occurred, but you must ask permission to photograph the injured person or their companions.

4. Preserve Tangible Evidence

Preserve any evidence, such as a broken piece of machinery, tools, a broken tile, or a torn floor mat. You must also preserve any notes, emails, reports, maintenance records, and any other communications regarding the incident.

Never hide or destroy evidence. You don’t have to hand it over to the injured person without a subpoena, but you must keep it as-is. In legal parlance, spoliation of evidence can be treated as an admission of guilt.

5. Promptly Notify Your Insurance Company

Regardless of the circumstances, you must put your liability carrier on notice of a potential claim.

Your liability policy is a binding contract, and much like an auto policy, your insurance agreement almost certainly requires you to notify the insurance company and cooperate with their investigation of a claim.

A typical notice clause has language like this:

“Insured (you) agrees to notify the insurer (your insurance company) of any accidents and thereafter comply with all information, assistance, and cooperation which the insurer reasonably requests, and agrees that in the event of a claim the insurer and the insured will do nothing that shall prejudice the insurer’s position…”

If the person who slipped and fell was an employee, promptly contact your workers’ comp insurance provider to confirm the employee will receive follow-up medical treatment.

If you are served with notice of a personal injury lawsuit, immediately forward the summons and complaint to your insurance company. Your insurer will usually hire an attorney and pay for your defense.

6. Consider a Courtesy Call

Unless your lawyer or insurance company advises against it, make a courtesy call to the injured person within a day or two. Make it brief. Let them know you are concerned about their well-being and ask if medical care was needed. Since you should have already reported the incident to your insurer, tell the person they may be hearing from the insurance company.

If the person says they’ve contacted a personal injury attorney, ask for the law firm’s name and phone number. Immediately pass the information along to your liability carrier.

Handling Fake Injury Claims

Slip and fall “scams” happen all the time. You may think your business is hazard free, and it may very well be. Unfortunately, some people will feign accidents and injuries to bilk your insurance company.

A common fraud is exaggerating the scope and severity of a minor injury, like a simple sprain that leads to disability claims.

Some fake slip and fall claims are “staged” by one or more parties to convince you they were injured as a result of a hazardous condition on your property. Scammers have been known to bring liquids and purposely spill them on the floor. Others may have cohorts who act as witnesses, not only to the accident but as to the “pain and suffering” of the person who fell.

It’s almost impossible to thwart such fraud completely, but with immediate and proper documentation of the circumstances, you can help the insurance company uncover the truth.