The following is not to be construed as legal advice. For expert advice, consult a lawyer, barrister, or solicitor who is qualified to answer your questions on all aspects of business liability.
Being an entrepreneur or small business owner means you have to juggle several important aspects of business. One of the aspects that is oftentimes overlooked is liability issues. One lawsuit could be all it takes to lead to shuttering your business for good. So what are some of the most overlooked liabilities?
Misuse of Intellectual Property
If you put together a hand-out to share with customers and potential customers, make sure that everything in that hand-out has been copyright cleared. From photographs and cartoons to sections of a book you may be quoting from, make sure that everything is either copyright cleared or falls well within the Fair Use clause, and that you provide accurate source credit.
Unlawful Transmission of Personal Information
With new rules in place on the Internet as it pertains to confidential information (including email addresses), it’s more important than ever to make sure you and your employees and/or contractors keep to the letter of the law. Whereas in the past, it may have worked to beg forgiveness over asking permission, these days it’s clear that permission must be sought, secured, and confirmed otherwise you could find yourself with bigger problems on your hands.
Just because you’ve contracted with a third-party to provide services doesn’t mean that the third-party is fully responsible for any lawsuits arising from an event or a contract. It’s up to you to ensure that you have sufficient insurance to cover anything from work-related injuries to customer accidents on-site. And it’s up to you to confirm in writing that the third-party has sufficient insurance to cover any mishaps.
There is always the possibility that a product could cause an injury to a customer, either because the product is faulty or because the customer misused the product. From negligence claims to consumer claims, it’s important to cover all your bases. Don’t assume that you and your business are off the hook if the injury is caused by customer misuse of your product. When McDonald’s coffee scalded and injured a McDonald’s customer, the franchise was held responsible.
Take the time to understand how you or your business may be unknowingly endangered. Speak with your insurance company to ensure that you have adequate protection, not only for your business but for yourself (especially if your company is unincorporated). Discuss potential scenarios with your accountant and lawyer to reduce and limit the chances of litigation in the future. And remember that even with the best planning possible, you can’t plan for everything.
Additional Suggested Reading
Stella Liebeck v. McDonald’s Restaurants, P.T.S., Inc. and McDonald’s International, Inc. (August 18, 1994)
Charles A. Summers v. Howard W. Tice, et al. (November 17, 1947)
M’Alister (or Donoghue) (Pauper) v Stevenson (May 26, 1932)