RISKVUE ARCHIVE | FEATURE STORIES

Premises Security Liability:
How Crime Can Take A Bite Out Of You

Business owners’ and landlords’ premises liability risks have greatly expanded in the last 15 years or so. It’s not just slip-and-fall claims anymore...you also can be held liable for the criminal acts of others that occur on your property.

The Legal Theory Behind Premises Liability

Tort law says that business owners and landlords have a duty to protect patrons and tenants against unreasonable risk of physical harm. In the past, most premises liability cases involved a dangerous physical condition of the property that led to an injury, such as a slippery floor or loose stair board.

But courts have begun to hold businesses accountable for injuries that they can reasonably foresee, regardless of how they occur. Today, anyone who opens their premises to the public for business purposes is also liable for harm caused by the accidental, negligent or intentionally harmful acts of third persons.

Who Is At Risk?

Apartment buildings, hotels/motels and retail establishments are the most common targets of civil suits in security-related premises liability cases. However, you cannot be held liable for a crime unless you’ve breached the duty to protect and that breach becomes the “proximate cause” of an injury.

How To Avoid Premises Security Claims

To avoid liability for criminal accidents on your property, you must take measures to prevent “foreseeable” incidents. Courts have determined injuries to be foreseeable if a prior similar incident occurred or if the “totality of circumstances—including the crime rate in the surrounding area, past complaints about security, and whether the business owner knew of any similar incidents”—indicate you should have anticipate the injury.

Practical steps you can take to reduce your risks include:

• Determine whether you operate in a high-crime area. If so, you’ll have to take greater precautions than a business in a low-crime area.
• Investigate any criminal incidents occurring on or near your premises. What factors contributed to the crime? Late hours of operation? Lax security?
• Look at your physical surroundings. Do they invite criminal activity? Consider lighting levels, security of entrances/exits, alarms and other security devices. If they’re inadequate, the investment you make in improving them may save you thousands of dollars by preventing liability claims and lost time, and by improving employees’ sense of security and morale.
• Train employees how to prevent and deal with criminal activity.
• Make sure you have adequate insurance coverage. Your commercial general liability policy covers you for premises liability suits brought by third parties. However, some premises security suits involve million-dollar settlements—you may want to consider buying umbrella coverage to boost the limits of your CGL. 

riskVue | The webzine for risk management professionals
October 2000