For a certain fan, seeing Rick Springfield perform in 2004 quickly went from dream come true to conundrum when the "Jessie's Girl" singer's bum landed squarely on her head. According to Insurance Business America, the plaintiff Vicki Calcagno sued Springfield for damages, alleging that the collision left her unconscious for 10 to 30 minutes and temporarily disabled.
It could have been a compelling case if she had more proof than an up-close photo of Springfield's rump (snapped minutes before the descent) and her unconvincing head clutching (though the butt incident happened over a decade ago and she attended a Cyndi Lauper concert just a week after the injury). Apparently, the court agreed that the whole lawsuit smacked of opportunism and dismissed it.
Rick Springfield's behind liability aside, the case serves as more than an amusing anecdote. It's a good illustration of how frivolous lawsuits work. Let's take a look.
Meritless Lawsuits: Not Just a Problem for Rich and Famous Booties
Celebrities and big companies seem as though they'd be better targets for torts, but that's just not the case. By and large, small businesses bear the brunt of litigation costs in this country. Specifically, small businesses bore 81 percent of all tort liability costs in 2008, according to US Chamber Institute for Legal Reform study [PDF]. In terms of dollars and cents, that amounts to…
- $105.4 billion in tort costs for small businesses.
- $35.6 billion in out-of-pocket costs (i.e., expenses insurance didn't cover).
You may think a case that gets thrown out like the Springfield lawsuit won't cost a pretty penny, but if there's anything you can be sure of, it's this: lawsuits are never cheap or easy affairs. Even the most ludicrous claim can keep you tied up in meetings with your lawyer, and all that time and counsel costs cold hard cash. The US Chamber Institute for Legal Reform study puts a figure on it: expect to spend at least $2,000 to $5,000 on legal defense fees alone just to contend a meritless lawsuit.
Is There a Way to Avoid Frivolous Litigation?
There's no predicting when you might face a frivolous lawsuit, and it's difficult to pin down why people pursue a case that has little holding power. Perhaps the idea is to force your hand and get a quick settlement (not a bad bet, considering that 95 percent of small-business owners settle out of court just to put an end to the whole ordeal).
It's also worth noting that many attorneys refuse to take on a weak case, lest the plaintiff's litigious ire be directed at them. But there are exceptions to the rule (as we saw in the Springfield case), so don't rely on others' ethics to spare you.
Having said that, you're not completely without recourse when freak accidents turn into lawsuits. In fact, General Liability Insurance offers coverage expressly for these instances. Here's what you need to know:
- Your business is liable for bodily injuries that happen on its premises or that your work causes.
- If a third party (i.e., anyone who doesn't work for your business) suffers an injury on your property, they may sue for damages.
- Your General Liability policy can pay for the ensuing legal expenses (e.g., lawyer fees and settlements or judgments), no matter if the claim is legitimate or meritless.
If your business is open to the public, the necessity of General Liability's coverage can't be overstated. An honest slip-and-fall accident could seriously hurt a visitor, and your policy gives you the means to make amends. And if someone tries to take advantage of your small business and allege that someone's rear end fell on their head, your GL policy can step in to address that claim, too.
To learn more about the policy, read "What Does General Liability Insurance Cover?"