Protecting Your Business Against Premise & Financial Liability: Part 1

posted on October 20, 2015 by SuperUser Account

by Real Estate, Jason Pearson

avoid business liabilityThe new school year is upon us, and the students are back. With the much-anticipated influx of returning students comes the joy of increased revenues and more foot traffic into the many fine local businesses surrounding the campuses. However, with this blessing also comes the prospect of liability. Few problems can ruin a profitable season quicker than a personal-injury claim. Unfortunately, no matter what precautions a business takes, there still lies the possibility of someone getting hurt. Keep in mind there are steps you can take that can lower your exposure and minimize the impact of a personal-injury claim, should one be brought against you.

What many people do not realize is that just because someone gets hurt on someone else’s property does not automatically entitle the injured person to money damages. Generally speaking, the “status” of the person while upon another’s land dictates what the landowner’s duties are to the person. 

Three Premise Liability Statuses Recognized by Michigan law:

1. Trespasser: 

  • Trespassers are people who are on the property of another without permission. 
  • The landowner (or possessor) owes the trespasser only the duty not to intentionally injure them.

2. Licensee (Social Guest): 

  • Licensees are social guests with no commercial benefit to the landowner, like a friend coming over to watch the game, or someone coming to a church to receive charity. 
  • Property owners and business – referred to as licensors – owe licensees the duty to warn of hidden dangers (explained in more detail below).

3. Invitee (Business Guest):

  • Invitees are business guests. There is a monetary goal or prospect to the landowner – referred to as invitor – by inviting the person onto his, her or its property. The “customer” is the most classic example of an invitee. There does not have to be an actual monetary gain to the landowner; there just needs to be the possibility or expectation of financial gain. 
  • Invitees receive the highest protections under Michigan law. The property owner, store or lawful possessor of property must not only warn invitees of hidden dangers, but have the added duties of:
  • Inspecting the property for dangers; and
  • Taking steps to make the property safe, such as placing a wet-floor sign or making repairs. 

However, Michigan law holds that property owners are not insurers of the public’s safety; hence, where I explained above that getting hurt on someone else’s property does not automatically entitle one to money damages. It is the injured person’s burden to prove that you were negligent – that you did something wrong that was a cause of the injuries. Keep in mind, though, just because something is dangerous, does not mean that you will be liable if someone gets hurt. To trigger the duties explained above (warn, inspect, repair), the danger must be hidden, stated in legal terms: not readily observable upon a casual inspection by a person of average intelligence. If the hazard or dangerous condition is readily observable upon a casual inspection by a person of average intelligence, then the condition is considered “open and obvious.” If someone gets hurt on a condition where the hazard was open and obvious, the landowner is NOT responsible for the injury or its consequences, including medical bills and lost wages.

In part 2, I'll explain what the necessary steps are for protecting your business against premise liability and how to properly avoid personal injury accidents and claims at your business location.

Sign up for our Newsletter

Please include your mailing address to receive a print copy of our quarterly newsletter and/or your email address to receive the newsletter to your inbox.
Enter the code shown above
* Required

Have questions? Want to learn more? Feel free to

get in touch »