The rising threat of negligent security claims: Proactive measures for mitigation

In 2012, James Carmichael had made arrangements to sell an iPad and met a potential buyer in a CVS parking lot. However, the sale fell through. As the buyer left, another individual appeared and held Carmichael at gunpoint, demanding all of his money and the iPad. Carmichael complied and pled for his life while he pulled his own weapon to protect himself from the thief. The gun jammed. The robber then proceeded to shoot Carmichael multiple times in the stomach, back and shoulder before fleeing the scene.

Carmichael managed to pull himself into the CVS store and contacted EMS for assistance before collapsing. Although his life was saved, he was been left with permanent nerve damage, hearing loss and chronic pain. His medical expenses totaled $725,800. Carmichael sued CVS for negligent security and premises liability. The jury awarded $45 million in damages, where 5% of the fault was given to Carmichael for a total award of $42.75 million. The jury awarded 0% liability to the actual shooter.

Nuclear verdicts are when a jury awards a significantly higher-than-expected value of a case. They are a growing trend that can occur from any form of litigation involving companies and insurance carriers. In 2019, a jury awarded $70M to a man who was shot by a carjacker in a Kroger parking lot. In 2021, a Florida jury awarded $177 million to a woman who was assaulted by a hotel security guard. In each of these cases, known as nuclear verdicts, businesses and property owners are being held responsible for negligent security.

Understanding negligent security claims

Negligent security claims present a significant legal issue for businesses and insurance carriers, with a growing trend of high-value verdicts that can have severe financial and reputational consequences. These claims hold property owners responsible for injuries resulting from crimes that occur on their premises, emphasizing their duty to foresee potential criminal activities and take reasonable steps to prevent them. To navigate the complexities of negligent security claims effectively, businesses and insurers must adopt proactive measures and collaborate with experienced adjusters.

This article explores key aspects of mitigating negligent security claims and the role of independent adjusters in the process. In the Carmichael case, the plaintiff attorney brought several key aspects that highlight the ‘foreseeability’ of a crime happening on CVS’s property including: previous complaints by CVS employees, knowing the neighborhood had a high crime rate, removing armed security, and a lack of proper lighting.

While criminal cases demand proof beyond a reasonable doubt, civil lawsuits for negligent security in most states require a 51% demonstration of the property owner’s negligence in preventing a foreseeable crime. A 2018 DecisionQuest survey showed 88% of respondents believe companies should take any and all security and safety precautions no matter how impractical or unrealistic. Increasingly, juries are holding businesses accountable for crimes that occur on their premises regardless of practicality. These claims typically attack businesses in three main areas:

1. Insufficient security systems: Inadequate lighting, absence of security guards, locks, fencing and warning signs contribute to negligent security claims. To establish liability, plaintiff attorneys often highlight the lack of proper security measures and the failure to address previous complaints or known high crime rates.
2. Excessive force: Cases involving excessive force arise when individuals in positions of authority use more force than reasonably necessary to restrain, detain or apprehend others. The terms and conditions outlined in security contracts play a crucial role in assessing the appropriate use of force.
3. Inadequate response: Negligence can also stem from the failure to respond appropriately to incidents. Property owners and security personnel must take prompt action when crimes occur on their premises. Negligence may be demonstrated if they fail to fulfill their duty to protect individuals and property.

Proactive measures for mitigation

To minimize risks associated with negligent security claims, businesses can take proactive measures to address security concerns. The following strategies can significantly contribute to mitigating such claims:

1. Provide adequate security measures: Implement comprehensive security measures, including security guards, appropriate lighting, fencing, and other relevant measures. Regular maintenance and monitoring of security systems are essential in demonstrating a commitment to safety and deterring criminal activity. It also involves encouraging property managers to regularly report the on-the-ground situation. Has a light gone out? Does the fencing need repairs? Documentation that it’s being monitored and managed will be the greatest shield.
2. Clear and conspicuous warnings: Display warning signs in areas where crimes are likely to occur or have occurred in the past. Ensuring proper lighting and regular checks to maintain legibility enhance their effectiveness.
3. Prompt response to crime reports: Document and promptly respond to crime reports, ensuring thorough investigation and appropriate actions are taken. This demonstrates a proactive approach to maintaining security on the premises.
4. Have adequate insurance coverage: Conditions on the ground change over time. If there is not proper coverage, the property owner may become liable for the financial risks. Thus, encourage underwriters to become proactive and better involved with these properties.

Importance of independent adjusters

Independent adjusters play a crucial role in investigating and managing negligent security claims. They offer several distinct advantages over relying solely on a defense attorney, including:

1. Impartial investigations: At their core, adjusters are fact-finders. Adjusters are trained to conduct impartial and non-biased investigations, ensuring a fair assessment of the claim. Even more proactive, an experienced adjuster can perform a pre-risk assessment with the property manager and underwriter to proactively head off any potential issues before they become problems.
2. Localized expertise: Adjusters often possess localized knowledge and familiarity with the communities in which they operate. Often, these are areas the adjuster grew up in, involve neighborhoods the adjuster knows well, and they know how to speak with their fellow locals. When an outside attorney becomes involved, that avenue for settlement can be jeopardized.
3. Early warning system: Adjusters can act as an early warning system, alerting the carrier if their investigation indicates a potentially litigious or challenging claim. This allows the carriers to review the facts, engage appropriate legal representation, or authorize a settlement offer to avoid prolonged and expensive litigation. Adjusters and attorneys can work together to ensure cases don’t go ‘nuclear.’

Negligent security claims present a significant risk for businesses and insurers, demanding a proactive approach to mitigate potential liabilities. By prioritizing comprehensive security measures, prompt responses to incidents, and clear communication with independent adjusters, businesses can minimize the likelihood of such claims and protect their reputation and financial well-being. Collaboration with experienced independent adjusters ensures a thorough investigation of claims, enabling effective decision-making and strategic resolution. Embracing these measures and recognizing the evolving landscape of negligent security claims will help businesses and insurers navigate this complex legal area successfully.

Taylor Greene (tgreene@jcgreeneco.com) is assistant vice president of the James C. Green Company.

Related:

Parents not immune from liability after rottweiler attacks their child

Examining complexity in automotive liability

Handling electric and semi-autonomous vehicle claims