This month one group decided to explore the issues involved in managing business liability. To help guide us in this topic we invited Kevin Elder from the San Luis Obispo Law Firm of Sinsheimer Juhnke Lebens & McIvor, LLP. The meeting included 7 members and the discussion was lively and interactive.
The issue of managing business liability is a varied topic and it was clear that each of the members had different hot buttons related to this. Certainly insurance – especially errors and omissions – was a common tool used to manage the liability, but there are also lots of considerations over the terms and conditions in business contracts.
Another area of great interest was employee relations and its associated liability. While the conversation did not go deeply into the employee relationship it was clear that all businesses struggle with the balance of the different priorities in this area.
One example of how this issue varies from business to business was in the area of indemnification terms and conditions. For several businesses this was a big deal while others it was a non-issue. This is one of the great things about the Roundtables is that you get to see different perspectives to the same problem and it makes you think deeply about the variables.
One comment in the meeting that I thought was important was “Anybody can sue anyone at anytime” and in that statement is the problem. While it is important to start with a good contractual relationship it is the quality of the relationship and the management of expectations that stop or create disputes. What was very clear from the conversation is that everyone has challenges in this area and there is no simple answer to managing liabilities. What everyone realized is that over managing liabilities can restrict a business from taking advantage of market opportunities needed to grow the business.
Within the meeting it was interesting to hear the experiences of the other CEOs that had made similar decisions with very different results. This causes me to compare and contrast my observations and experiences with theirs and in that is the value of these groups.