Careers Business Ownership What Is Negligence? Definition & Examples of Negligence Share PINTEREST Email Print Dennis Degnan / Getty Images Business Ownership Operations & Success Business Law & Taxes Sustainable Businesses Supply Chain Management Operations & Technology Marketing Market Research Business Insurance Business Finance Accounting Industries Becoming an Owner Table of Contents Expand What Is Negligence? How Does Negligence Work? Defenses to Negligence How to Protect Your Business By Jean Murray Jean Murray Jean Murray, MBA, Ph.D., is an experienced business writer and teacher. She has taught at business and professional schools for over 35 years. Learn about our Editorial Process Updated on 12/06/20 Negligence is the failure to take proper care appropriate to a given set of circumstances and results in harm to someone else. Negligence may involve carrying out an inappropriate action or failing to carry out an appropriate action. Learn more about negligence and how being sued for negligence could affect your small business. What Is Negligence? The legal standard for determining whether someone has been negligent is what a reasonably prudent person would have done in a similar situation. In order for negligence to be proven in court, four conditions must be met: It must be clear that there was a duty to act.It must be proven that there was a failure of the duty to act.It must be proven that harm was caused.It must be proven that the failure of the duty to act was the proximate (direct) cause of the harm. If any of these four points can not be proven, negligence can not be proven. For example, although harm may have been caused, if there was no duty to act, there was no negligence. Or if it can be shown that the duty to act had nothing to do with the harm—that it was not the cause of the harm—there was no negligence. The Hand Formula In January 1947, Judge Learned Hand of the Second Circuit of the U.S. Court of Appeals in New York created a formula for determining whether the defendant in a negligence case had failed in their duty to act. The formula, B < PL, was part of the basis for the court's decision in United States v. Carroll Towing. If B < PL, where B is the burden of taking precautions, P is the probability of loss, and L is the gravity of the loss, then the defendant had a duty to act and failed in that duty. Because the burden of taking precautions was less than the probability of loss multiplied by the gravity of the loss, the defendant should face some amount of liability. How Does Negligence Work? The "reasonable person" standard changes based on circumstances. For example, what is reasonable for an average person to do in a medical emergency situation is not the same as for a medical doctor, who is held to a higher standard. Similarly, the owner of an inn would have a higher standard of care to keep guests safe than a homeowner would to someone who wandered uninvited onto their property. Here are some examples of negligence that relate specifically to owners of a business. If you failed to fix the ceiling in your office that had been damaged and pieces of the ceiling fall on a client, injuring them, you could be sued for negligence.If you fail to properly train a new employee and the employee harms someone in the course of their duties, you might be subject to a negligent hiring complaint. If one of your truck drivers backs out of your driveway without looking and damages a passing car, you might be sued for their negligent driving. Negligence is separate from obviously illegal actions. For example, if one of your employees assaulted a customer, that's outside the bounds of the employee's duties and, more important, it's also against the law. Malpractice as a Form of Negligence When you hear the term "malpractice," it's often in connection with a doctor, but malpractice is simply negligence by a professional. Professionals are held to a higher standard of care because they must have a license or certification to do what they do and they have to abide by the legal and professional code of their profession. Malpractice applies to dentists, chiropractors, attorneys, and accountants, among other types of professionals. Defenses to Negligence The two common defenses to negligence involve the doctrines of contributory negligence and comparative negligence. Both affect a plaintiff's ability to collect damages in a negligence case. A contributory negligence defense says that the plaintiff contributed to the situation, while comparative negligence assigns percentages of responsibility, taking some of the fault away from the defendant. Contributory Negligence: If the injured party had any fault at all in the case—even as little as 1%—they would most likely be barred from collecting damages as a result of the other party's negligence. Comparative Negligence: If someone is speeding and driving while drunk and they crash into someone who was distracted because they were talking on their mobile phone, a court might determine that the first party was only 80% responsible for the harm to the second party. Any damages awarded to the plaintiff would then be reduced by 20%. Most states recognize comparative negligence, but only a few preclude a plaintiff from receiving any damages if they contributed to the situation that led to their being harmed. How to Protect Your Business You can't watch everything and everyone all the time, but you can lower the possibility of negligence claims against your business. Here are a few quick examples of steps you can take. Follow OSHA guidelines and requirements. The Occupational Safety and Health Administration is the federal agency charged with protecting employees from workplace hazards, but their advice can be used to protect customers too. For example, make sure you have warning signs in potentially hazardous places.Train employees in using care when working to prevent accidents and injury to themselves and others.If your employees have specialized training, such as plumbers or electricians, make sure they are licensed and complete all certification requirements. Overall, the best way to minimize the possibility of negligence claims against your business is to be constantly aware of your duty to act to prevent harm to employees, customers, suppliers, and the public. Key Takeaways Negligence is the failure to take proper care appropriate to a given set of circumstances.Negligence results in harm to someone else.It may involve carrying out an inappropriate action or failing to carry out an appropriate action.In order for negligence to be proven in court, the plaintiff must show the defendant had a duty to act; the defendant failed their duty to act; harm to the plaintiff resulted; and the harm was a direct result of the defendant's failure of duty to act.