Professional negligence vs. ordinary negligence: A small business owner’s guide

A lawsuit is one of the great fears for small business owners. A single lawsuit can financially ruin a business, especially if the business does not have proper small business insurance in place.

One of the most common types of lawsuits small businesses see are negligence suits. Negligence lawsuits can often be the most expensive type of lawsuit a business faces in its lifetime.

What is negligence?

Negligence is when a person’s failure to fulfill their duty of care leads to harm of another person, another person’s property, or another person’s finances. There are multiple types of negligence, some personal (also known as “ordinary”) and some professional.

If you are a current small business owner—or hope to become one in the future—read on to learn about the various types of professional negligence and how you can uphold your standard of care to protect your business against a negligence lawsuit.

What is ordinary negligence?

Ordinary negligence occurs when harm is done by a person who fails to take precautions a reasonable person would take in regard to their actions or property. An ordinary negligence claim implies that the person who caused the harm did not intend to, yet damage still occurred. Therefore, the negligent party should be held responsible for any financial losses sustained by the injured party.

Some examples of ordinary negligence include:

• A driver who is texting and driving runs a red light and hits a pedestrian crossing the street, injuring them
• A homeowner who runs an electrical cord across their walkway to power lawn decoration on Halloween, which causes a trick-or-treater to trip and break a bone

What are some forms of ordinary negligence?

Contributory negligence

Contributory negligence is when a person isn’t entirely to blame for the harm done, but they did contribute to it. An example of this is 2 drivers texting while driving, crashing into and injuring each other.

Comparative negligence

Comparative negligence is when the injured party is partially to blame for the harm they’ve incurred. In these cases, proof that even a tiny percentage of the responsibility belongs to the suing party may mean the person is ineligible to receive compensation.

Comparative negligence is rare, partially because only 4 states currently practice it. These are Maryland, Virginia, North Carolina, and Alabama. The District of Columbia also practices comparative negligence.

An example of this type of negligence is a person suffering an injury from a fallen object in a store partially because it was improperly shelved and partially because they climbed the store shelves to reach it. While the store is responsible for the improper shelving, the customer is responsible for their choice to risk their safety to climb on the fixture.

Vicarious negligence

Vicarious negligence essentially means indirect responsibility. A common example of this is a dog assaulting an individual. The owner did not harm anyone, but their dog did. In a case like this, it is likely that the owner will be found responsible and will need to pay to cover any expenses incurred by the injured party due to the dog attack.

What is professional negligence?

Professional negligence is similar to ordinary negligence but is specific to the context of business. It occurs when a business owner or, by extension, an employee fails to meet the reasonable duty of care standards required to ensure the safety of clients and customers, which then results in harm or injury. Professional negligence can also mean the failure of the business to provide the services for which it was hired.

What is "duty of care?”

Duty of care refers to the common standard expected from a professional working in any industry. Every industry has a different duty of care standard. This standard may be highly regulated, as is the case in medicine or law, or more nebulous.

It is a good idea to keep up with the current standards in your industry to ensure that you know what is expected of you in today's world. What may have been an acceptable standard a decade ago may be too low a standard now.

What is an example of professional negligence?

Professional negligence lawsuits are brought against small businesses quite regularly. However, not all of them qualify as negligence. To understand what qualifies and what does not, consider the following example of professional negligence:

A shop owner just mopped their floor but did not put up a 'caution' sign to alert customers to the potential hazard. A customer doesn't realize the floor is wet. They slip and suffer an injury as a result. The failure to place the sign is an example of professional negligence. Now, the customer can sue the business for negligence because they wouldn’t have had to fall if the owner had done their due diligence to ensure the area was safe.

In contrast, a customer who falls on a perfectly dry floor because their child tugs on their leg while walking does not qualify as professional negligence.

Does a professional negligence claim always require physical injury?

The damage caused by professional negligence does not have to be in the context of bodily harm. Injuries can be financial, reputational, or to property.

Other examples of professional negligence cases include:

• A property owner fails to repair a broken railing, which leads to an elderly member of their community falling down the stairs
• An employee fails to stock a shelf properly, and a heavy item falls off the top, hitting a customer
• A mechanic fails to ensure a vehicle is safe to drive before releasing it back to the owner, which leads to an accident
• An accountant making an error on a client’s tax return
• A nurse failing to swab an area with alcohol before giving a shot, leading to an infection

It is also important to note that employees are not generally held responsible for negligence. Instead, clients and customers will normally sue you or your business in the case of employee negligence. This is just one more reason why comprehensive small business insurance is essential.

Is my small business at risk of being sued for negligence?

Workers’ compensation coverage typically covers you and your employees should negligence lead to an injury on the job. (Though employees can sue you for negligence if they believe they were injured because of your carelessness. This often happens when a workers’ comp payout doesn’t cover the full breadth of financial damages incurred by the injured employee.)

In terms of clients, customers, and third parties, however, the chances of a negligence lawsuit are considerable unless you take action to avoid them. Anytime a person walks onto your business’s property or engages your professional services, you could get sued if things go wrong. It is your responsibility to ensure that you implement protocols and practices to create a physically safe environment. You also must put systems in place to avoid a careless error if you run a service-based business like an accounting firm or a therapy practice.

Is every industry at risk for professional negligence?

Yes. Consultants, therapists, construction workers, manufacturers, lawyers, doctors, marketers...the list goes on. Anytime you offer paid services or products to a client or customer, you are expected to uphold a certain standard of care.

Negligence-related insurance policies you need

Your best defense against a claim of negligence is proper insurance from a quality insurance provider. The following policies can help to protect you in the event of a lawsuit:

• Professional Liability Insurance: Also known as Errors & Omissions Insurance, this insurance protects you from negligence lawsuits on the grounds of error, oversight, or undelivered services
• Cyber Liability Insurance: Protects you in the event of a malware attack, data breach, or another damaging cyber event
• General Liability Insurance: This policy covers you for multiple forms of professional oversight, including customer injuries and/or property damage, defamation, copyright infringement

Is professional negligence the same as malpractice?

Professional negligence is harm or injury caused by a business's failure to take reasonable care. Malpractice requires similar circumstances but refers to negligence committed by those in specific licensed professions such as medicine or law. It also usually implies some form of intent, though the intent may not have been to harm.

For example, a medical professional may fail to provide certain treatment to a patient, even though they know they should. If the patient suffers greater injury or death as a result, that can be considered medical negligence, and the medical professional can be sued for medical malpractice.

Another example of malpractice is if a law firm offers legal advice or legal services to a client but fails to learn the facts of the case. If this leads to financial losses, the client can sue for malpractice.

Additionally, malpractice can fall under Tort Law. A tort is an act or omission that results in injury or harm to another. Injury is different from harm in this context and means an invasion of a legal right. Harm, on the other hand, refers to an actual loss suffered.

How do you prove professional negligence?

Negligence claims can be hard to prove, especially between businesses and clients or customers. To win the case, the client, customer, or third party must prove a cause of action, which is comprised of four key components:

• Duty of care: The reasonable responsibility of certain professional standards that the owner was responsible to uphold
• Breach of duty: The business did not uphold that duty either by action or inaction
• Causation: The claimant suffered a personal injury as a result of the negligence
• Evidence: Requires proof of the injury itself as well as how the professional’s breach of duty led to that injury

What is the difference between gross negligence and ordinary negligence?

Gross negligence differs from the careless acts of ordinary negligence in that it refers to severe and reckless misconduct. In many cases, gross negligence includes the purposeful omission of information or a voluntary act that led to the harm of another.

To illustrate the difference, consider the following comparison:

• Ordinary negligence: A long-haul trucker fails to use his turn signal and sideswipes another car.
• Gross negligence: A long-haul trucker purposefully chooses not to sleep even though they are very tired and falls asleep at the wheel, sideswiping multiple vehicles.

How can I avoid a professional negligence claim in my business?

If you want to fortify yourself as much as possible against any form of negligence, here is what you can do.

Set reasonable expectations

Underpromise and overdeliver. The moment you overstate your capabilities is the moment you open yourself up to a lawsuit. If you don’t deliver on what you promised and a client suffers a financial loss as a result, they can sue you for damages based on your lack of care with your word. Whenever possible, detail agreed-upon expectations and duties in a clear and concise contract and leverage disclaimers on all products and services.

Clean and repair your store and equipment

If you don’t have a regular cleaning and maintenance schedule in place, make one. Failure to meet minimum standards of cleanliness and equipment maintenance can lead to illness and injury—both of which are grounds for a claim of professional negligence.

Keep impeccable records

Whether a negligence lawsuit is fair or false, detailed records of actions and communication will ensure that you are saved from paying more than you need to in the case of a lawsuit—or can perhaps save you from paying anything at all. Great record-keeping includes paper trails, video surveillance, and phone records. Organize your records regularly to ensure that they are ready when and if you need them.

Stay compliant

Compliance rules can change quickly. The more you stay up to date with any adjustments to industry requirements, the less likely you will be faced with a claim of negligence for failing to comply with necessary rules and regulations. This is especially important in highly-regulated fields like law and medicine.Negligence of any kind is grounds for a lawsuit and should be avoided at all costs. As this guide shows, there are many ways to mitigate your risk—it just takes a little care, diligence, and protection.

Protect your business against lawsuits with Huckleberry

At Huckleberry, we know how important it is for your business to be protected against negligence claims. That’s why we’ve made it easy to get your small business insurance online in just a few minutes.

While you’re at it, check out our workers’ comp calculator to see how much you’re likely to pay for this required form of coverage.