Hindsight is 20/20: Importance of Pre and Post Loss Risk Mitigation Analysis

Upon notice of an injury on their property, commercial property owners universally have one question – “What could we have done differently?” The answer to this question is multi-faceted and incident specific. However, there is generally one common theme. Namely, a failure to assess and address risks before and after an injury is allegedly sustained. Whether it be a pothole in a broken sidewalk, insufficient lighting, lack of proper security, or failure to include appropriate vendor contract language, hindsight is indeed 20/20. However, all is not lost. By conducting risk assessment and mitigation analyses, commercial property owners can greatly reduce future exposure.

What is a Risk Mitigation Analysis?

A Risk Mitigation Analysis can take many forms, but generally involves several key components. A cornerstone of the analysis is property inspections. Ensuring that patently dangerous conditions are identified and remedied is a significant step in avoiding future personal injury claims. Identifying potential code compliance issues is a key aspect of any proper inspection. Codes are often in place to prevent injuries and, where addressed, the potential for injury is mitigated.

Additionally, resolving code compliance issues pre-loss eliminates one of plaintiffs’ strongest grounds for establishing liability, negligence per se. Under this legal theory, a plaintiff may recover by simply showing that the injury causing condition violated a building code and/or state or federal law. For example, a plaintiff falls while descending a non-code compliant set of stairs. If the plaint can establish that the non-compliance caused or contributed to the fall, the court will likely find you liable as a matter of law.

Another key element of a risk mitigation analysis is the review of incident reporting procedures. In many cases the lack of appropriate procedures results in the failure to address potentially dangerous conditions. While doing so will not prevent the present loss, it certainly increases the chances of a successful defense, thereby significantly reducing exposure.

For instance, a tenant falls in the parking lot of your property. The tenant reports the issue to management, but you have no incident reporting policies and procedures. As such, management fails to prepare an incident report, obtain a statement from the tenant or any witnesses, or perform any investigation. In the subsequent litigation, your carrier will lack important evidence to controvert the tenant’s allegation. This includes such things as contemporaneous statements, which will often be less self-serving and more truthful, or photographs or video of the condition and potentially the incident itself.

Proper incident reporting procedures may also prevent similar claims in the future. When proper procedures are in place, management can identify risks and perform any necessary repairs. While the lack of such action may not impact the defense of the present claim, as such evidence is usually inadmissible, it will go a long way to preventing similar injuries and claims.

Vendor contract review is an essential part of any Risk Mitigation Analysis as well. By way of example, you employ a contractor to perform snow removal during winter months. The contract sets forth only the scope of work and corresponding charges. Not addressed are the respective obligations in the event of a claimed injury. This includes proper indemnification and defense provisions or additional insured designation requirements. A tenant or customer is subsequently injured because of the vendor’s insufficient services. Without appropriate contractual language, you may bear exposure irrespective of whether you caused or contributed to the loss. Indeed, with the appropriate contractual language your carrier may be able to remove you from a lawsuit without incurring any defense or indemnity obligations.

Meanwhile, a robust Risk Mitigation Analysis may be able to prevent, or at least more successfully defend against, wrongful security claims. These types of claims frequently involve significant injuries such as gunshot wounds, resulting in high exposure. Liability in these cases turns primarily on the extent of security measures respective to the foreseeability of the wrongful act. Simply, the higher level of similar wrongful/criminal acts, the greater security measures required to reduce the risk, or exposure in the event of a claim or suit. To assess the appropriate level of security, a Risk Mitigation Analysis should involve the obtaining of crime grid reports, assessment of security appropriate in response thereto, and, when appropriate, consultation with security experts.

How Can I Obtain a Risk Mitigation Analysis?

CP Law Group is a leader in commercial property liability defense. It employs legal experts in this arena and offers extensive pre and post-claim risk assessment services. CP Law Group will tailor its services to your particular risk mitigation appetite and customize the Risk Mitigation Analysis appropriate for you and your properties. For more information, please contact Jonathan S. Wallack, Esq. or Vanessa Pouladian, Esq.