Criminal Liability Part 2

Who is Affected by Criminal Liability?

Very rarely does criminal liability relate to an organisation damaging another organisation. More often than not, when criminal liability occurs at the corporate level it is usually a lone individual that suffers from the consequences. Male or female, black or white, poor or wealthy, corporate liability issues don't discriminate, and can result in a number of disastrous problems, including but not limited to, personal injury, defamation or slander. Criminal liability for an organisation can be as simple as a supermarket's fruit and vegetable department leaving a banana peel on the ground in one of the isles. All it takes is for a customer to slip on this banana peel and injure themselves. In addition to the civil problems, in which the individual can sue the supermarket for personal damages as a result of the injury, there can be criminal issues that arise as a result of the supermarket not providing their required 'duty of care' to the customer. Corporations can either insist that their customers or clients sign liability waiver forms (considered somewhat unprofessional and difficult to obtain signatures) or either to seek professional liability insurance.

What Type of Issues Consist of Criminal Liability?

Another significant issue that affects corporations is the issue of theft - quite often 'intellectual theft' which generally relates to the theft of ideas or concepts. It could be that Company A steals or makes a copy of a logo that Company B uses, and claims it as their own - although slightly more sophisticated, it is no different from stealing apple of the next-door neighbours tree, and can be classified as theft under criminal law. Provided the person or corporation committing the offense is over the required age of responsibility (14 in most states, but 16 in others) and they recklessly or intentionally committed the offense, they are prosecutable under the criminal law.

Punishing an Organisation for Breaches of Criminal Liability

Corporations are usually punished by either of three ways - these are fines, and/or may consist of jail time and community service orders for those in charge of the corporation and/or committed the offense - these vary considerably of course based on the seriousness of the offense. There is a significant train of thought, however, that as a company itself cannot physically go to jail, that fines being the only method of punishment cannot provide appropriate justice. This is backed up by the fact that when an organisation is fined a considerable amount of money, a significant toll is taken on the corporation, and every stakeholder within that company, be it the employees, the customers or the shareholders, they are all forced to suffer from the criminal punishment - despite being innocent parties in the actions of the corporation.

The Importance of Criminal Liability Insurance for Corporations

If you're an organisation, the most important thing to do (other than pay your taxes and breathe oxygen!) is to obtain basic criminal liability insurance - at least at the most basic level. Commercial general liability insurance is available from a number of providers throughout the United States and the rest of the world. Corporations need commercial general liability insurance because in a nutshell, CGL protects the business in the event that they are sued or taken to court. It's generally used to cover claims against an organisation for injury or property damage. Generic examples of this are if a customer is injured on site at the place of business (like the customer in the supermarket example provided earlier) or if one of Company A's employees damages property at a client's office or home. Without such commercial general liability insurance, a corporation is most vulnerable to lawsuits that can potentially have a devastating impact on it as an entity. It is an unfortunate part of running a business that there is always the potential of being victim of a legal suite, sometimes for the most petty of reasons. Some people will just sue to keep themselves busy. It is for this reason that commercial general liability insurance is one of the most important and popular business insurance products sought after by managers and business owners.

Be Sure to Read the Fine Print - Not Everything is Always Covered

Not everything is always covered in commercial general liability insurance policies. Generally injuries or property damage from pollution caused by your corporation is not covered, data liabilities, asbestos and nuclear injuries and property damage are also not covered. Due to their complexity, issues such as these usually require a more specific policy than a commercial general liability policy can offer. Corporations have two choices - they can either coerce clients and customers to sign liability waiver forms with increasing regularity or they can go down the professional path of acquiring insurance. It's really not that expensive either - especially in comparison with the cost of defending the corporation in the courts with lawyers that charge their rates by the minute!

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