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Warning Trend

The forecast is bad if your company fails to caution the public about a possible danger.

Last October, jurors in Compton, California, awarded more than $2.6 million to a registered nurse at Harbor UCLA Medical Center. The nurse said that because a construction company had let debris spill into a hallway, she'd slipped on a screw while carrying a patient's tray. She claimed the fall caused knee, hip and back injuries.

On New York's Long Island, a bus driver crossing a parking lot at the Montauk Soundview Resort tripped over a protruding manhole cover and fell, damaging the man's prosthetic knee and leading to a series of medical procedures. After a jury last fall found the resort liable, the case settled for $500,000.

The law has long held property owners liable when customers, vendors and others are injured because of a hazard on the property. Traditionally, a property owner who knows of a hazard--or should have known-and fails to either fix the problem or warn people about it is liable for any injuries caused. In the cases cited above, the owner should have sloped asphalt up to the protruding manhole cover, and the debris in the hallway should have been swept up.

The duty to warn includes alerting customers to the presence of any dangerous people nearby if you know about them and the customer doesn't. Consider a recent case from Chicago. Two women passed a group of bouncers in a hallway as they were leaving a bar. The bouncers didn't tell them that the two young men outside who were beating on the door were drunk, angry, and had been ejected from the bar earlier for fighting. Out on the sidewalk, one of the young men heard a noise behind him, thought it was one of the bouncers, and whirled around with a martial arts kick that caught one of the women in the head. Her broken jaw was wired shut for six weeks.

The owners of the bar got the case thrown out of court by arguing that the business had no obligation to protect the women from incidents occurring outside. But an Illinois appellate court disagreed, noting that "the bouncers exported the club's problems to the sidewalk and then ignored the troublemakers while allowing two female patrons to leave through locked doors into the path of potentially dangerous men." In a similar case, a California court ruled that a bouncer should not only warn the patron in such a situation, but walk her to her car.

What to do? Maintain your property to reduce the chance of someone having an accident, warn the public of known dangers, and carry plenty of insurance.

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This article was originally published in the May 2002 print edition of Entrepreneur with the headline: Warning Trend.

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