Business Liability: What You Need to Know

Liability and Keeping Customer Data Safe and Secure

Business owners are obligated to protect the private information of their clients and customers to the fullest extent possible, although that has become increasingly difficult over the last decade or two due to the rise of internet commerce and, alongside it, fraud. To minimize the chances of hackers or other unwanted entities securing private customer data, it is wise to garner only the personal information from consumers that a business truly needs, and then establish methods to get rid of it as soon as it is no longer needed.

Storing Private or Sensitive Customer Data

According to the Federal Trade Commission, today’s business should practice two types of safe recordkeeping: electronic security and physical security. Additionally, they must ensure that all employees are well-trained in the safe storage of sensitive customer or client data. Keeping customer data electronically secure involves a number of steps and processes. First, it is wise for all employees to utilize strong passwords (usually those that contain a combination of upper and lowercase letters, numbers and symbols) for their computers and company cell phones, if applicable. Additionally, it is critical to create a secure general network. This includes making sure business computers are well-equipped with spyware and firewalls, and that all computer software is up to date.

Dealing With a Data Breach

Often, a business owner’s best bet in minimizing the damage done by a data breach is to have a solid plan in place that offers step-by-step instruction as to what to do in the event that a breach occurs. The best laid plans dictate who is responsible for what following the breach, who needs to be made aware of the breach and what types of computer software or equipment must be shut down immediately to prevent further unwanted access to sensitive customer or company data.

Small Business Ownership and Premises Liability

The term ‘premises liability’ is used to describe a business owner’s liability in terms of accidents that occur on a business property. Slip-and-fall accidents are among the more common experienced by today’s business owners, and this type of accident can occur under any number of different circumstances. Say items are littering the stairs and a person tumbles down them because of it, or that an icy storefront sidewalk or puddle of water on a store floor causes someone to slip and break a limb. These are all examples of situations for which a company owner may be held liable for injuries and associated expenses.

The plaintiff in a slip-and-fall case must typically prove several things in order to win a slip-and-fall case: that the company owner is responsible for the condition that caused the accident, that the owner either knew of the problem and failed to fix it, or he or she did not know about the problem, but should have, and failed to fix it at the expense of the plaintiff.

An Employer’s Liability for Employee Actions

Employers can frequently be held accountable for the actions of their employees, which demonstrates the need for employers to hire trustworthy, reliable people in the first place. Inevitably, however, some company owners are going to find themselves in situations where they are being held liable for the behavior of those they employ, and this is largely due to the fact that plaintiffs and their lawyers may find it easier to extract money from a company than an individual.

Also underscoring the fact that it is necessary for owners to perform their due diligence during the hiring process is the concept of ‘negligent hiring or retention.’ Essentially, this means employers can be held liable if they place an employee in a role for which he or she is not appropriately trained or an appropriate fit. Hiring someone to work with small children who has been previously convicted of child molestation is one example of negligent hiring. Generally, what has to be proven in these types of cases is that the employer helped the offender find new victims by hiring the individual in the first place.

Businesses can be held liable in any number of different areas, but this content is intended to offer an overview as to what owners can do to minimize their chances of a potentially business-ending lawsuit.