Business Law Liability of Business for Negligence

Question: Discuss about theBusiness Lawfor Liability of Business for Negligence. Answer: Introduction Tort Law refers to the civil wrong which results in loss or harm to one person due to unfair acts of the other person. However, if the harm or loss is caused due to act of negligence then it cannot be called as crime but it can be said that the negligence is a kind of tort occurs due to damages between the parties. Business organizations are liable and responsible for the loss and damages caused due to negligence as vicarious liability and strict liability. Organizations are liable to ensure the stakeholders safety for the unreasonable negligence and required to compensate the loss or damage. In case of strict liability that is applicable in case of personal injury, the victim is required to prove the act of negligence before claiming the compensation. If the harm is proved then the business organization are strictly liable to compensate the damages (Backof 2015). For instance, if the business organization manufactured defective products that caused harm to the consumers the organiza tion has absolute liability to compensate the amount of loss to the consumers. Actions to be Taken to Limit the Liability In order to limit the liability of negligence, the actions that can be taken is liability insurance that is undertaken to protect the potential losses from the legal lawsuits. Another action that can be taken to limit the liability is the policy on professional liability that covers the liability at the professional level. Further, Business organizations are required to complete legal formalities for the manufacturing processes and issue of shares. Organizations are required to document the business actions with respect to the relevant business decisions, business functions and content of business meetings. The business organizations are also required to maintain separate assets for business and personal purpose to maintain the expenses and other relevant charges by following the invoices and other documents (Samsonova-Taddei and Humphrey 2015). Reference List Backof, A.G., 2015. The impact of audit evidence documentation on jurors' negligence verdicts and damage awards.The Accounting Review,90(6), pp.2177-2204. Samsonova-Taddei, A. and Humphrey, C., 2015. Risk and the construction of a European audit policy agenda: The case of auditor liability.Accounting, Organizations and Society,41, pp.55-72.