Premises Liability Lessons

November 1998

Managing:Legal Issues

Premises Liability Lessons

There are ways to protect yourself from liability lawsuits filed by customers who get hurt while visiting your store. But first you need to understand what your liabilities are


Your customers are what many state laws refer to as "invitees." You owe them what the legal profession calls "a high duty of care" to protect their safety while they're in your store. If that duty of care is not met and a customer is injured, he or she can sue you for damages – including pain and suffering, medical bills and lost wages. A single lawsuit by a seriously injured customer could wipe out your business – even if you have insurance.

As a retailer, there are two ways to protect yourself. You have to clearly understand what the law requires and the duty the law imposes on you as a business owner. Second, you have to be adequately insured. We'll discuss your duties and responsibilities this month, while a later column will explain how to choose insurance to protect yourself.

The body of law applicable to most personal injury claims is the law of negligence. Negligence law determines when you are responsible for someone else's injury and must pay them some kind of compensation.

The law starts with the premise that when you engage in certain kinds of activity, you have a duty to use reasonable care to keep from hurting others. For example, when you drive, you have a duty to do so with reasonable care. If you violate that duty by driving recklessly and an accident results, you are liable – not just because your driving caused an accident, but because your breach of duty to drive carefully caused an accident. You have a similar responsibility as a business owner.

In New Jersey, for example, courts have said "the duty owed to a business invitee [customer] is to use reasonable care to make the premises safe, including the making of reasonable inspection to discover a dangerous or defective condition."

Many business owners think they are liable to anyone who gets hurt in their stores. They're not. That kind of liability is known as strict liability. It means you are responsible for an accident or injury no matter how much care you took to prevent it. With the exception of some dangerous activities, strict liability does not apply to retail stores. But states do impose a high duty of care on business owners when it comes to customer safety. You can reduce your liability risk if you take a few simple and often inexpensive steps before an accident happens.

Note: remember that most negligence and premise liability law is state law and varies to some degree from state to state, but the basic principles discussed in this article are applicable in most states. Let's look again at what the New Jersey courts have said.

What Makes You Liable
For you to be liable, your customer has to be injured by a dangerous or defective condition. Not all accidents meet this requirement. Someone can fall down stairs by not watching where he or she is going. The stairs are not necessarily dangerous or defective.

But someone also can fall down stairs because of improper lighting, lack of railings, worn carpets or even visually confusing or disorienting carpet patterns. Distracting signs or promotional displays near stairs can contribute to falls. Courts in New Jersey and other states have found these conditions to be dangerous and defective and held business owners responsible.

There are obvious instances of negligence – like a vacuum cleaner or light cord left in an aisle – and less obvious ones. People fall on floors that are too highly waxed or that become dangerously slippery when wet, says Norman Goldstein of N.R. Goldstein & Associates, a private consulting and forensic engineering firm in Robbinsville, NJ. Customers have successfully sued after falling over floor mats and area rugs that were not flat or secured to the floor or after stumbling over ridges where tile or wood flooring meet carpeting. Doors or side panels in entryways not made of safety glass also pose dangerous possibilities. Courts generally find a condition to be dangerous if it's likely to cause a reasonably careful customer to have an accident.

More Potential Problems
Building codes set standards for all kinds of things in public buildings, from step height and width to lighting levels to door height clearances. Violations of these standards are almost always negligence and leave you open to liability.

Professional engineers can inspect your property to find any violations that would elude a casual overview. For example, many stairways have center railings or side railings made from 2-by-6-ft. pieces of wood. These do not meet code – they're too wide to grip firmly. This violation can be fixed easily and inexpensively by grooving the board near the top or installing a brass rail the length of the handrail, says Goldstein.

It's important to point out, however, that while violating a building code is almost always negligence, meeting the code doesn't guarantee protection. Some local code provisions allow non-safety glass in original doors in older buildings. A court easily could find the glass created a potentially dangerous condition even though it met code. That's a risk jewelers in such older premises must evaluate.

Getting Good Advice
While private engineers can do these inspections, Goldstein says, there are less-expensive sources of help. Contact your insurance company. Many insurers are proactive, and loss prevention is a big part of the service provided. Learn what your insurance company will do to help you prevent a claim. Find out whether it only sends fliers with helpful tips or whether it will send someone for a site evaluation. Local officials, such as building inspectors, can help determine whether your store meets current code requirements. Fire officials also can help identify dangerous conditions.

If you hire a private engineer, he or she probably will charge $150 to $250 per hour, but this may be worth it to you. Future insurance premiums and even your insurability is based in part on your claim history. A private engineer should provide you with a detailed report on both code violations and other conditions that could open you to liability, The report should indicate remedies.

These remedies don't always require a huge investment of money. Many dangerous conditions can be cured with a well-placed and simple warning sign. An unexpected step up or down can easily cause a dangerous condition. Adequate warning signs could render such a step safe under negligence laws. But signs aren't always enough. Posting a "caution, wet floor" sign probably would not help if that type of floor became unusually slippery when wet and thus required a level of precaution that is unreasonable to expect of a visitor. This would be particularly true if it were in an entryway customers had to use to get in or out of the store. Again, a consultant, insurance expert or building inspector could help you evaluate the remedy that works in your situation.

January 1999: "Choosing Liability Insurance"

William H. Donahue Jr. is an attorney in New Jersey.

Copyright © 1998 by Bond Communications.


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