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Tort

A tort is a wrongful act that harms a third party, either an individual or a business.

What is a tort?

A tort is a wrongful action or omission that harms a person or business, prompting the injured party to seek compensation in civil court. As a result of committing a tort, the guilty person (the defendant or tortfeasor) bears legal liability.

How is a tort different from a crime?

A tort is a violation of common law, civil law, or social norms that lead to another party’s personal or financial loss. A crime, on the other hand, is a violation of municipal, state, or federal criminal statutes.

Another way to view the difference between tort and crime: A tort wrongs one individual or business, whereas a crime does harm to society as a whole. The remedy for a tort is commonly the payment of monetary damages, whereas the remedy for a crime can be a fine or a prison sentence.

General liability insurance can provide coverage for monetary damages if you lose a tort case in court.

What are the main types of business torts?

There are many different kinds of business torts. Some common ones include:

  • Property torts: You damage someone else’s property.
  • Liability torts: Your product or service hurts someone.
  • Dignitary torts: Something you do or say harms a third party’s reputation.
  • Infringement torts: You mistakenly or deliberately use another firm’s trademark or intellectual property.
  • Negligence: In the course of delivering a service, you fail to meet professional standards, thereby harming your customer.

Learn more about torts that can lead to business lawsuits.

What are the legal remedies for torts?

If a third party – either a person or another business – hurts your company, consult an attorney immediately to get advice on how to best seek compensation. If you win the case, a judge will order the defendant to pay you damages.

Going to court is also an option if you want to put a stop to ongoing wrongful acts. A judge will do this by issuing a restraining order or injunction.

What if you or your company is accused of committing a tort?

If you or your company harmed a third party, who is now suing you for damages, consult with an attorney immediately.

Also notify your insurance company of the incident if you have general liability insurance, a business owner’s policy (BOP), or an umbrella / excess liability policy.

General liability insurance or a BOP – two of the most useful forms of small business insurance – will protect you in the event a court holds you legally liable for someone else’s personal, property, or financial loss. Both policies can cover your legal costs (attorney’s fees, court costs, expert witnesses) and any damages a judge orders you to pay the plaintiff.

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