As a small-business owner, you can protect yourself and your business from costly litigation by recognizing situations that expose you to tort liability. A tort is a civil wrong causing injury to another either through negligence or under the theory of strict liability. Business owners are liable for injury caused by their own negligence and for injury to another — through no fault of the business owner — where the law imposes strict liability.
Duty of Care
Injured people can initiate lawsuits for negligence against business owners who have not properly exercised a duty of care; nevertheless, strict liability cases don’t require demonstration of a duty of care. If a customer slips and injures himself because you failed to clean up a bottle of fruit juice that spilled in the aisle of your grocery store, you are legally liable for injuries resulting from the customer’s fall because you were negligent. In contrast, strict liability cases are based on the understanding that certain activities, such as selling or manufacturing defective products, are so dangerous that no level of care can render them safe; therefore, any injuries resulting from such activities will automatically be compensated by the party responsible for the dangerous activity.
Business owners are only liable for negligence if their failure to carry out their duty caused the injury; for strict liability cases against manufacturers or sellers of defective products, the injury must result from the defect. If your grocery store has been immaculately kept and a customer slips and falls because she was not minding her step, you have breached no duty of care and are not liable for negligence because you did not cause the injury. If you make ceramic mugs, but a defect in the glazing causes the mug to be susceptible to shattering, you are strictly liable for injuries caused to people when the mug shatters; however, you are not liable for an injury caused by drinking a beverage that was too hot from the mug because the injury did not result from the glazing defect.
Even if you have acted negligently, you can raise certain defenses to explain your behavior and avoid liability to the injured person; however, strict liability claims have no defense. One defense to negligence, called “assumption of the risk,” excuses liability if the injured party should have understood that her actions would result in injury but carried out the act in disregard of the risk. For example, if you notice that a bottle of fruit juice has spilled in the aisle of your grocery store and you block off the aisle with a rope and put up a sign reading, “Danger: Do Not Enter,” and a customer ignores the sign, removes the rope, then injures himself, you can defend against liability by stating that the customer assumed the risk by disregarding the warnings you put in place. A second defense — contributory negligence — bars an injured person from recovering monetary damages, in some jurisdictions, if he bore any of the faults for the injury; for example, if he dropped the bottle of fruit juice and caused the spill, then slipped and fell in your grocery store, he would not be able to recover monetary damages for negligence because his actions contributed to his own injury.
The law sometimes holds you partially liable for injuries resulting from your negligence; however, strict liability cases always result in 100 percent liability. Under the concept of comparative negligence, an injured party can only recover monetary damages for the percentage of the injury caused by your negligence. If the court thinks that the customer who slipped on the spill in your grocery store was 20 percent at fault for not noticing the brown liquid in the aisle, then she will only recover 80 percent of the total amount of damages awarded by the court.