It's no secret that today's society is increasingly litigious. We've all heard the stories of outrageous settlements for hot coffee that burned someone, a gun that went off when the trigger was pulled and flammables that burned when they were set on fire. One result of this litigious tendency is warning labels on entirely innocuous items; another, and far more significant result, is financial ruin for a company that suffers a judgment that is not covered by active liability insurance.

There are some professions that have dealt with liability suits and liability insurance for any number of years; doctors, architects and builders would be examples of companies or professionals who have long required protection from the financial effects of an error or oversight. But in a country where lawyers outnumber engineers by wide margin, today we find that ANY business can find itself embroiled in a fight for its financial life over the most trivial of causes.

So what can create liability for your company or yourself in your professional duties? It goes far beyond the obvious, like a surgeon removing the wrong limb or an architect designing a building that falls down when it rains. Do you, or your employees, ever give customers advice? Do they precede, or follow, that advice with a disclaimer that it be used at the customer's discretion and without warranty, expressed or implied, from your organization?

Of course not.

But giving advice, especially advice given in a professional capacity, can open you up to liability claims. Say you own a small tire shop, and one of your employees recommends a specific brand and model of tire to a customer for a particular application. The customer, based on that advice, purchases the tires and has them mounted to his vehicle.

Let's say that your employee, with the best of intentions, had accidentally recommended a tire intended for a passenger car to this customer, who wanted tires for his light truck. The tires, used inappropriately, fail prematurely and cause a crash. Could you be sued?

Absolutely. And while no one can predict the outcome of a court case (especially a hypothetical one), it's within the realm of possibility that a judge or jury could decide that your employee, who speaks for you as an agent of your organization, was negligent in not checking the proper model number of tire your customer required. It's further possible that the jury could decide that the customer, having based his decision on your professional advice, is entitled to compensation for any loss he suffered by your (or in this case, your employee's) error.

How much will that judgment be? Well, if the customer lost his vehicle in the accident, it may be tens of thousands of dollars. If, on the other hand, the customer lost several family members in the accident, it may be tens of millions of dollars.

Hopefully, you're starting to realize that the normal, everyday running of nearly ANY business involves a risk of incurring a liability claim. You can't do business without giving advice, selling products or providing services, and there is always a chance that the advice could be wrong, the product defective or the service insufficient. When that happens, you must think not only of the value of the service or product you've provided, but also the potential harm or injury that could result from its failure. If the .03 cent disposable cup you're selling is found to be tainted with lead, the value of the claim can exceed the value of the product by many orders of magnitude.

You have probably started to recognize ways your own profession or business could become vulnerable to a liability suit. The only reasonable response is to insure oneself, with the help of an experienced underwriter, against all foreseeable claims. The expense, however unpleasant, can one day save your business from financial ruin.