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As a small business owner, you want to focus on making your product or service the best it can possibly be, and getting all the clients or customers you can. And what you may be overlooking is your legal liability to those customers and clients as well as to your staff.
As an employer, you could be responsible for a whole range of harms, from office pranks to car accidents. So how do you limit your employer liability and protect your business at the same time?
First things first -- yes, you can be liable for the acts of your employees. It's a legal doctrine called "respondeat superior," under which employers are vicariously liable for their employees' acts in the course of employment. Determining what counts as "the course of employment," however, can be a little tricky.
Like when a person commits a violent act -- upon a coworker or a customer -- were they acting as your employee at the time? Or were they acting on their own volition? The answer could mean thousands if not millions of dollars.
In a company car? On the way to work? On a lunch break? Again, whether the accident occurred during the course of employment will determine the extent of your responsibility to the employee and anyone else involved.
You're also responsible for creating and maintaining a healthy work environment, and could be held liable in employee lawsuits if you've allowed harassment, discrimination, or other unwelcome or offensive conduct to flourish in your office.
The good news? You can insure against much of this liability. Property and commercial liability insurance policies may cover some of your employees' acts, should you get sued. (And you may want to check out these other five types of insurance you might need, as well.)
Another way to limit your small business's legal liability to talk to an experienced employment attorney -- you can find one near you in our directory.
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