Chicago Business Lawyer Blog

A recent case involving technology giant Apple shows that having the proper type of insurance can protect against even something as basic as a slip-and-fall claim.

Apple Insider reports that an insurance company recently lodged a complaint against the company disputing a claim by Apple, a Chicago construction company and the Chicago Transit Authority for an incident that happened while an Apple Store was being built here in 2010.

While Chicago Business Attorneys may focus on properly written contracts, protecting intellectual property and dispute resolution -- and all those are critically important as well -- making sure that your home base is protected is crucial too. Employee issues, whether providing protection from injury or ensuring the company is protected from discrimination suits, can just as easily damage a company as any other issue.

Chicago premise liability issues or those involving the products that are packaged and shipped for distribution are issue that must be taken into consideration by a successful business. Any workplace can be opened up to lawsuits and claims if they don't have the right kind of insurance to protect from injuries. This is even more important in business that involves machinery, manufacturing or construction.

According to the news article, Apple is in a pinch because in 2010, the technology giant entered into an agreement with the transit authority and a construction company to renovate a subway station near the store. The deal was to allow Apple to buy out the advertising space and rename the station.

Scaffolding and shoring was set up and Apple and the construction company were set up as "additional insureds" and were supposed to be covered by the insurance company's limited liability coverage. But while under construction, a woman fell and fractured her hip on a sidewalk. The scaffolding company's insurance was added 19 days after the injury, meaning Apple and the construction company were hung out to dry. The companies have now sued each other.

This type of situation can happen in any office setting or work site. Employees can become injured on floors, by chemicals or through hot objects. Companies must ensure they protect themselves to comply with state and federal standards.

Starting in March, the Americans with Disabilities Act will include additional changes that public places must comply with to avoid risking fines or penalties. Among the changes, 1 in 6 parking spaces, a change from 1 in 8 spots, must be van accessible. Mobility devices, other than wheelchairs, must be accommodated.

Shelving and other objects must be no more than 48 inches high. There are other changes in place that went into effect in March 2011, but won't be enforced until this year. This is just another thing that companies must adhere to in order to stay above-board in all respects.

Businesses have a lot on their plate and many things to remember. Dealing with employee issues to ensure premise liability problems don't derail the company is a big one. Complying with state and federal laws regarding the public is another. These issues shouldn't be prioritized over business-related matters, but they also shouldn't be overlooked, either. A Chicago business attorney can help companies ensure compliance and protect them from legal issues at the same time.

Continue reading "Proper Small Business Insurance Can Protect Chicago Companies From Liability Lawsuits" »

A Tinley Park-based healthcare company is being sued by the Illinois Attorney General's Office, which claims it pressured consumers into buying expensive, and perhaps needless, body scans.

Obviously any suit filed by the state must be taken seriously. As the healthcare system continues to fracture and become more specialized, and as the introduction of technology continues to make procedures more complex, such companies must seek the legal advice necessary to stay on the right side of the law -- and must aggressively defend themselves from unwarranted allegations. Finding small business legal help in Chicago or hiring an attorney with the knowledge and experience to help ensure you are in compliance with laws and regulations governing product safety and liability, is essential to a young company's growth and viability.

Frankly, paying for expensive and perhaps unnecessary medical scans sounds like routine medical care! Perhaps we are being facetious, but you see how quickly that line begins to blur. Whether it's by telephone or over the Internet, rules and regulations govern the sale of goods and services to the public. In some cases -- such as medical or legal services -- other legal or ethical rules may apply.

The lawsuit filed in Cook County Circuit Court accuses Heart Check America of using unfair and deceptive business practices to pressure consumers into buying 10-year screening contracts. The lawsuit contends consumers were not evaluated by medical providers and claims that the procedures could detect cancer or other diseases were false or misleading. It also claims consumers may have been exposed to risks, such as radiation exposure or false positives and that the company solicited from people on the National Do Not Call Registry.

Heart Check America had local offices in Arlington Heights and Tinley Park. The suit seeks civil penalties of $50,000, which could double if there is evidence of intent to defraud. The state is also seeking to recover the costs of investigating and prosecuting the case.

Illinois AG Lisa Madigan is also focusing on Internet scams. Internet sales in general are subject to an increasing number of complex state and federal laws, as illustrated by the recent passage of the sales tax in Illinois. Companies that do business online must stay abreast of new rules and regulations in the various states in which they operate. Madigan said she is particularly concerned about seniors.

"The Internet provides us with amazing opportunities, but unfortunately it also provides criminals with the opportunity and powerful means to deceive and defraud," Attorney General Madigan said. "It's important that we help seniors equip themselves with the tools needed to recognize online scams, deal safely with insecure websites and avoid other potential pitfalls online."

Continue reading "Allegations of Heart Monitoring Fraud in Chicago show Sales by Phone and Internet Subject to Increasing Regulation" »

I was talking to a businessman the other day about an investment he was considering. He is looking at one of those self storage facilities. It seems like an attractive opportunity at the right price. It's fully leased with many longtime tenants for its almost 200 units. It appears to be a relatively simple and stable business model, with relatively few workers, utilities or expenses. The purchaser gets not only the operation but the real estate as well. This seems promising and no red flags jumped out.

However, even though I try to be very practical about risks and expenses, I encouraged him to be very thorough and consider zoning, geotechnical and environmental assessments. Why? Because when you're entering into a merger or acquisition or loan or similar transaction you have to worry about more than your own worries. You have to consider what the next investor, purchaser or lender is going to think or do. In other words, you don't want to get stuck with the hot potato or left standing when the music stops.

For example, I have had a long-time specialty in managing environmental risks and matters for mergers, acquisitions, divestitures and financings. It's clear that when the deal centers around factories, refineries, mines and the like no one is going to question doing extensive due diligence about the potential for chemical contamination to present material hidden or contingent liabilities. But, with less alarming properties and businesses there's often an understandable tendency to want to avoid the expense of environmental studies or tests. Still, if there's a decent chance that these issues will come up down the road anyway, then it is far better to bite the bullet and deal with it upfront, rather than have an issue be unearthed when you're now stuck with problem.

Once I was involved in litigation that arose when the purchaser of a sand and gravel pit later discovered that a previous owner had his trucks collect waste drums on their return trips and then bury them in a corner of the property. This eventually resulted in a multi-million dollar remediation. There's no guarantee that standard environmental investigations would have diagnosed this condition, but it would have been preferable to have made the attempt. And, this can apply to other aspects of a business that can present time bombs, including potential employment, product liability, regulatory compliance and contractual obligation risks.

So, if you are considering investing in new business or property, remember that it's important to worry about the concerns of the other guy, in addition to your own, to avoid getting stuck in the middle.

The Chicago business attorneys of Jeremy A. Gibson & Associates, P.C. are experienced in mergers & acquistions and other due diligence scenarios and are available to meet you in our Chicago, Deerfield and other satellite offices.

As Toyota's president prepares to testify before Congressional committees tomorrow, it is a good time to consider some basic principles when businesses learn of possible defects, safety risks or violations of law. The Toyota vehicle acceleration recalls and similar reports present a good case study. Apart from the underlying vehicle design, performance and correction issues, Toyota now faces even more attention, not to mention potential sanctions, over its handling of and response to the situation.

For example, the automaker has received subpoenas from several federal agencies that will review its approach. And, an internal presentation touting a Toyota's team success in minimizing corrective measures required by NHTSA and realizing huge costs savings has come to light, raising questions about priorities in the response. So, this story quite possibly will turn into another installment of: "what did they know and when did they know it" or "was the cover up worse than the crime?"

It may well turn out that Toyota has acted completely appropriately in responding to defect and safety concerns. Just like UFO sightings, it's not as if every consumer complaint has merit. And, it is reasonable to respond in a measure fashion when it is not clear exactly what is going on.

In any case, my experience with scores of regulatory, health and safety matters has led to a few basic starting guidelines. The old saying "safety first" still rings true. Take the initiative with potential problems and regulators and be proactive. And, do not put anything in writing in an unprivileged setting that you do not want to see on the front pages next month or next year.

In essence, although there always is an imperative to avoid unneeded expenditures, usually it is better to deal with potential safety problems as quickly and effectively as possible. In addition to putting human welfare over the bottom line, it's a basic quality matter and brand management. These problems usually only get worse and more expensive to address over time. Dealing with them upfront sends strong, positive messages to all constituencies: customers, employers, suppliers and regulators. In the long run, taking short cuts leads to illusory savings.

All that said, it is not always easy to decide what the right course of action is and it is important to have full and frank discussions when there is a crisis or potentially damaging or expensive problem. The purpose of the attorney-client privileges is to promote those types of internal conversations and reviews, by shielding certain (even potentially embarrassing) communications with counsel from disclosure. But, when a privilege is not applicable, and even when they are keep safety first in mind, executives and managers always should ask themselves whether they would want that PowerPoint slide, memo or email to be presented in a courtroom before sending it around.

Our Chicago and Illinois business lawyers are experienced in regulatory and risk management matters and would be happy to discuss this topic in further detail.

The scale of Toyota's recent defect and recall issues is staggering. And, so is the likely impact to sales and budgets. It is difficult to imagine how much Toyota and its relevant suppliers are spending on lawyers, experts, public relations consultants and the like. This probably will continue for years as lawsuits are filed and litigated.

Accordingly, there is no better time than now for virtually all businesses to assess and reconsider their risk management practices, including for product liability claims. In my experience, many, if not most, companies pay little attention to this because of the crush of everyday pressures.

The appropriate response of course will depend upon what the type of business; providing goods rather than services; serving consumers rather than businesses; manufacturing rather than distribution. More industrial or consumer types of businesses may need to monitor regulations, standards and closely. Some must carefully evaluate the quality processes of suppliers and their own operations. Others may benefit from looking for gaps in insurance coverages, such as those applicable to privacy, network or environmental risks.

No matter the client or business, some simple improvement to contracting methods usually is in order. Consistently following these few basic steps will significantly reduce potential exposure:

1. Keep warranties as narrow and short as reasonable and feasible. Care should be taken to not guarantee results, unintended uses, security or performance longer than three, six or twelve months.
2. Disclaim all warranties other than those expressly stated. Courts and statutes may find that implied warranties, such as those for merchantability or fitness for a particular purpose, apply if not waived in writing.
3. Limit liability to ordinary, direct damages, such as purchase price or out-of-pocket costs. Exclude liability for punitive or consequential damages, such as for lost profits or business interruption.
4. Cap total maximum liability for a transaction. For example, it may be appropriate to limit responsibility to $100,000 or $500,000 when providing a product or service costing significantly less than those levels.

These measures are common and usually acceptable. However, in some cases, federal or state law will override express disclaimers and require more favorable protections for consumers. And, regardless of contract provisions, sometimes accepting greater liability is needed to maintain a long-term business relationship with a customer. Still, overall, there usually is minimal downside to being conservative.

Our Chicago business lawyers are experienced in risk management measures and can help you quickly and affordably develop the approach right for your situation.