Legal Brief: Indemnity and Contribution
September 16, 2024
Security Business Magazine
Types : Bylined Articles
Understanding the differences may be crucial to protecting your business
In the security business, sometimes bad things happen. People make mistakes. Lawsuits result. You cannot reduce the risk of litigation to zero – unless you stop doing business. So, you must have a good lawyer, train your people, deploy sound operational protocols, and shift the risk of loss or liability to your insurer and/or others as much as possible. It is this last point that is worthy of emphasis here – shifting risk or liability to others.
When a security incident occurs, blame may be alleged in multiple directions. The victim or his/her/its insurer may make claims against the security company, their monitoring provider, or other potentially responsible parties (including a possible intentional tortfeasor – sometimes a criminal).
If a security company wants to shift the blame to others, it should, of course, assess the underlying facts and determine who is arguably at fault. If there is a basis to believe someone else is at fault, it may be able to shift the risk of liability by making a claim against the other party for indemnity and/or contribution.
Indemnity and contribution are legal doctrines, and they are often confused. Both address how financial responsibility is shared when multiple parties are involved in a legal dispute or claim, but they operate under different principles and serve distinct purposes.
It is your attorney’s job to counsel you on these doctrines and to invoke them when appropriate; however, a basic understanding of these concepts (and their differences) will help you protect your business.