The shift in premise liability negligence standards

Historically, in premise liability law in the United States, determining who may be responsible for injuries sustained on another person’s property has been dependent upon the legal status of the injured person at the time the injury took place. But as states shift away from antiquated common law legal statuses, claims adjusters must refocus their skills to ask probing questions, determine what’s reasonable and foreseeable and practice their negotiation skills to meet new standards.

Historical legal statuses and liability

The classification system used to determine legal status originated from English Common Law and divided guests on the property into three categories for the purpose of establishing a degree of duty owed to them:  

1. Invitees
   • Example: Customers of a store.
   • Duty owed: The highest duty of care, which would include having regular inspections of the premise and remediation of any potential dangers, or warnings of potential dangers if they cannot be remediated immediately
2. Licensees
   • Example: Social guests or service-related vendors employed by other companies who provide services on the owned property
   • Duty Owed: Moderate duty to warn of known dangers that are not easily seen, but there is no duty to inspect
3. Trespassers
   • Example: Burglars or anyone on the premises past permitted hours
   • Duty Owed: Least amount of duty, typically only to refrain from intentional harm

When an adjuster is handling a premise liability claim it can be critical to understand the injured party’s status on the property.  Unfortunately, an individual’s status on the property can change multiple times during a single visit, thereby creating complexity in the investigation. 

For instance, a visitor to a local retail establishment would be considered an invitee, to whom the highest degree of case is owed, while they are browsing the public areas of the premises. However, should they venture into areas designated as “Employees Only” or “Private,” their status could change to trespasser, which carries the least amount of duty. 

It becomes even more complicated when the trespasser is a minor child. Some states have adopted the doctrine of “attractive nuisance” to move away from the rigidity of duties owed to trespassers and allow for the introduction of reasonableness in deciding negligence. The trick, however, is trying to assess what is “reasonable.”

Negligence and shifting standards

Because of these challenges, there is a shift away from these common law practices and towards a “reasonable person standard” when assessing negligence. As of the date of this writing, at least 9 states have abolished the use of all 3 status types (AK, HI, IL, IA, LA, NV, NH, NY, NC), and another 14 states have abolished invitee and licensee statuses but retained the use of Trespasser (FL, KS, ME, MD, KS, MA, NE, NM, ND, OR, RI, TN, WI, WY). At least one other state, Georgia, has retained the use of legal status but changed the level of proof from “clear and convincing evidence of foreseeability” to “reasonably should have known” thereby coming more into alignment with states shifting away from the traditional common law practices and towards a reasonable person standard.  

The implications for claims professionals can be significant. This shift towards a “reasonable person standard” requires a much more in-depth understanding of not only the facts of the incident, but of the condition of the premises and surrounding environment in order to answer the core question of whether a property owner/occupier acted reasonably to prevent harm. A liability adjuster should explore at least three areas of actions:

1. Foreseeability of harm
2. Reasonableness of the property owner’s actions
3. The condition of the premises including security and safety measures 

Accounting for foreseeability of harm

Foreseeability of harm is not new to tort liability. The landmark case often cited with regards to American tort law goes back to 1928 with the Palsgraf v. Long Island Railroad Company. In this case, two employees of the railroad were attempting to help a late passenger board an already moving train. One employee was pushing the soon-to-be-passenger from the platform and the second employee was pulling from inside the train itself. During the transition, the passenger dropped his package which was full of fireworks. The fireworks exploded with sufficient force that it rattled the entire platform and a set of tall scales at the other end of the platform fell and injured the plaintiff. The plaintiff sued the railroad for negligence. Eventually, the New York Court of Appeals ruled the plaintiff’s injuries could not be a reasonably foreseeable consequence of attempting to help the man board the train and ruled in favor of the railroad.  

Key features of foreseeability vary by state but generally have the following aspects:

1. Reasonable prediction: Would a reasonable property owner/occupier have predicted harm given the circumstances?
2. Knowledge of risks: Normally includes some aspect of whether the owner/occupier knew about, or should have known about, the risk under a reasonable person perspective.
3. Preventative measures: Would a reasonable person be expected to perform periodic inspections or have reasonable security measures in place, including calling 9-1-1 for potential threats?
4. Similar incidents: Have there been similar incidents at the premises or in close proximity to the premise that a reasonable person would believe in higher risk levels? This can include local crime rates and history of similar crimes in the area.

Claims professionals and negligence today

Claims professionals can no longer rely upon legal status when assessing negligence. They will need to ask probing questions using critical thinking skills and a curious mindset to fully assess negligence. Judges frequently take the position that a “reasonable person standard” is a question for the jury rather than a question for the law. This will bring greater focus on the negotiating skills of claims professionals to demonstrate their knowledge of the facts and craft a persuasive argument to reach settlement prior to reaching a jury. Otherwise, businesses and their insurers can expect to see increased litigation rates and costs.