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The next liability frontier?

Article Excerpt
When crisis hits your company -- whether an industrial accident, a natural disaster, or even an act of terrorism -- your immediate instinct will naturally be to mount an immediate response. You will take care of the injured, put out the fires, secure the site, receive frightened family members, speak to the press, and so on. But as things calm down, two crucial questions will almost inevitably be directed toward the management and board of directors of your organization. Once they catch their collective breath, your employees, the media, government regulators, and the public will get around to asking:

* Did you take every reasonable precaution to prevent critical incidents like this one from occurring?

* Were you prepared to respond with the appropriate actions to protect and support your people in the event such an incident occurred?

Your answers could have enormous consequences for your company, its bottom line, and its future because of an emerging concept of liability -- negligent failure to plan.

There is not yet any reported law on the subject per se, but we believe that negligent failure to plan is likely to be tested as a new legal concept. Think of it as the common law of simple negligence applied under a newly critical lens. The essence of a negligence claim is relatively simple and not legislated except from behind the judge's bench and within the jury box. Its basics are a duty under the law; a breach of that duty by the failure to exercise the standard of care of a reasonably prudent person in similar circumstances; and damages that are proximately caused by such breach.

Responsibility to personnel

It is not a new idea that employers have a legal duty to exercise reasonable care in providing a safe workplace. Indeed, this is legislated by both the U.S. federal government and many state governments in the form of occupational health and safety laws. For instance, under the federal Occupational Safety and Health Administration, every covered employer has a general duty to provide a safe workplace, and the U.S. Department of Labor issues regulations and guidelines that essentially define the standard of care to be exercised by employers regarding things like hazardous materials and potentially unsafe workplace practices or conditions. Prevention and response plans to address workplace violence are also the subject of such guidelines -- a newly developing area over the past decade.

That this standard of care should extend to include crisis prevention and response planning comes as no surprise. Crises caused by industrial accidents, workplace violence, product tampering, and employer negligence have all occurred before and are all within the scope of foreseeable risks. Following Sept. 11,...

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