Premises peril: unpacking legal risks

Record date: 3/04/25
Air date: 3/26/25

In the final episode of Zurich North America's "Future of Risk" podcast miniseries on social inflation, James Beal, Executive Director at Georgians for Lawsuit Reform, and Rebecca Fozo, Claims Judicial & Legislative Affairs, at Zurich North America, delve into premises liability. They discuss the legal responsibilities of property owners to ensure safety and explain how jury verdicts impact businesses and strain the economy. The conversation emphasizes the need for tort reform to provide stability and fair legal processes to combat fraudulent claims.

In this miniseries, other episodes include:

January 15: 2025 Legislative outlook: Reforming legal system abuse

January 29: Wide implications of third-party litigation funding

February 12: Nuclear verdicts: The drivers, impacts and solutions

February 26: Social Inflation: Missing The role of claims fraud

March 12: Plaintiffs’ tactics: Fueling legal system abuse

Guests:

James Beal
Executive Director
Georgians for Lawsuit Reform

James was named Executive Director of GLR in January 2025 after 11 years at the State Capitol, where he served in the Deal administration, the Lieutenant Governor’s office, and most recently as General Counsel to Senate President Pro Tempore John F. Kennedy.

In these roles, he focused on bipartisan collaboration, stakeholder engagement, and drafting legislation to support Georgia’s business community. A trusted resource on legislative and legal matters, James is a Georgia State University double graduate and a member of the Georgia Bar. He lives in Atlanta with his wife, Catherine.

Rebecca Fozo
AVP, Claims Judicial and Legislative Affairs
Zurich North America

Rebecca is a Senior Consultant/AVP in Zurich North America’s Claims Judicial & Legislative Affairs team. The Claims Judicial & Legislative Affairs team provides education and public discourse on issues involving legal system abuse and works with industry partners and tort reform groups to grow a coalition addressing social inflation. Prior to joining Zurich’s Claims Judicial & Legislative Affairs team, Rebecca handled complex international claims, long tail chemical exposure claims, as well as multi-district litigation and class action claims for Zurich’s Mass Litigation team.

Prior to joining the Zurich team, Rebecca was a seasoned defense attorney practicing at several Chicago law firms. She primarily litigated cases before state and federal courts in Cook County and collar counties in the areas of municipal litigation, personal injury, toxic torts and employment law. Rebecca earned a Bachelor of Science degree in Environmental Sciences & Natural Resources from Purdue University and a Juris Doctor degree from DePaul College of Law in Chicago.

Host:

Al Orendorff
Communications Professional

Al Orendorff is a communications professional who has previously held leadership positions at Zurich North America, Allstate Insurance, Aon Corp., Genworth Financial and Choose Chicago.

Orendorff began his career as a journalist working in television and radio news, including stints at NBC-TV in Peoria, Illinois, Black Entertainment Television, and WBEZ and WGN radio in Chicago. He is based in Chicago.

(PLEASE NOTE: This is an edited podcast transcript, capturing speakers with natural speech patterns that may include incomplete sentences and/or asides, grammatical errors, verbal shorthand and some statements that may be less clear in print.)

Episode transcript:

AL ORENDORFF: What if a customer gets hurt at your place of business? Business owners are responsible for keeping their premises safe and free from hazards and to make whole those who have suffered injuries due to unsafe conditions at the place of business. But runaway jury verdicts and other unfair tactics are changing this dynamic.

Welcome to “Future of Risk” presented by Zurich North America. We explore the changing risk and resilience landscape and share insights on the challenges that businesses face to help you meet tomorrow prepared.

This podcast miniseries is all about social inflation. The term “social inflation,” refers to the rising costs of insurance claims and litigation that go beyond general economic inflation. Those costs are driven by societal factors rather than traditional market forces. Those societal factors include social attitudes, legal practices, legal system abuse and cultural norms.

The impact of social inflation goes beyond the insurance industry and leads to higher insurance premiums for businesses, a strain on the economy and growing financial impacts on everyday consumers. Over the course of this miniseries, we've learned businesses face risks that can expose them to lawsuits and increasing jury verdicts.

In our final episode, we're focusing on the shifting legal standards around premises liability. I'm Al Orendorff. Today, I am speaking with James Beal, the Executive Director at Georgians for Lawsuit Reform, and Rebecca Fozo, Claims Judicial & Legislative Affairs, Assistant Vice President at Zurich North America. James and Rebecca, welcome to the podcast.

REBECCA FOZO: Thank you, Al. Thanks for having us. I'm really excited to have this discussion with my pal James.

JAMES BEAL: Hi. Good morning. Yes, thank you so much, Al.

Premises liability explained: Key responsibilities and risks for property owners

ORENDORFF: Rebecca, can you set the stage for us? Liability insurance, most everybody knows, pays for injuries that happen on your property. What is premises liability?

FOZO: Sure, Al.

So, the technical definition of premises liability means a property owner can be negligent if there's a defective condition on their property, or they let a defective condition continue to exist after they maybe know about it, and then somebody gets hurt as a result of this defect.

In those cases, the property owner can be liable, and there's usually some types of degree of reasonableness required on the part of the property owner. But what constitutes a defect and maybe what reasonableness means in plain English varies from jurisdiction to jurisdiction. Now, the easiest way I could probably describe this is giving you a couple examples.

So, think of a slippery floor situation. Maybe you're walking through the grocery store, and somebody slips on a banana peel on the floor and is hurt. It could be something like a swimming pool accident where maybe the property owner did not secure the pool area and someone's hurt. Or even negligent security where maybe the property owner fails to implement a security measure, like having proper lighting in a parking lot or surveillance systems and the lack of security could lead to someone being hurt.

Duty of ordinary care: Establishing the standard of conduct required to avoid negligence

ORENDORFF: James, there's something called the duty of ordinary care. What is that?

BEAL: Rebecca touched on the general aspects of a premises liability claim and what those are. When we talk about a duty of ordinary care in Georgia. Specifically, that is the duty that is owed by a private property owner or a business operator to the folks who come on to their property to do business or engage with them otherwise.

The law puts into place that duty of ordinary care by statute. And then what we've seen over, several generations, is a body of law developed in the court system that sort of tells us what a duty of ordinary care actually looks like. Right now, the courts — to add a little bit more confusion to it — have called the duty of ordinary care, a duty to provide reasonable care, and then it kind of builds off of that. And so, what we've seen over the last several years, again, as the development of law surrounding what that means based on jury verdicts and interpretations by our higher courts. And that's sort of the way that most states will handle that. But in Georgia, we specifically have no framework in our statute that speaks to what a premises liability claim is, with the exception of that duty of ordinary care.

Frivolous claims and their financial burden

ORENDORFF: Thanks, James.

Rebecca, in your earlier comments, you had laid out some incidents that can become insurance claims. These same types of incidents, can they end up as lawsuits?

FOZO: Yes, Al, they can. These types of premises incidents can certainly evolve from a claim into a lawsuit. And we work with our customers and our claimants to make sure the injured party is whole if there is liability. But sometimes the parties disagree as to whether there's liability or what it would take to make somebody whole.

That's when a lot of times we'll see these claims develop into a lawsuit. and Each of these claims that maybe do develop into a lawsuit are different, and they rise and fall on their own sets of facts. So, we need to do a thorough investigation as to things like maybe what happened to the injured party, what the conditions of the premises were, were the premises’ owners reasonable in maintaining their property? Those sorts of things.

ORENDORFF: James, any thoughts? What happens when the unexpected happens?

BEAL: When things go sideways, so to speak, we see these claims sometimes turn into lawsuits, as Rebecca mentioned. They can become filings in court, and you go through the whole process. What we've been saying around the state capitol here, when we talk about it, the rigmarole of a lawsuit and getting dragged through that.

In Georgia specifically, we have seen standards surrounding these laws kind of go sideways themselves. We've seen runaway verdicts from shifting legal standards and one, very infamous case now is a case called “Carmichael versus CVS.” And obviously, CVS is a large company, but we also see claims against small businesses based on these runaway verdicts. These cases that get appealed, they go to a higher court and they set new standards for the law.

So, when we hear about some of these bigger runaway verdicts, it's usually against what is perceived as deep pockets, deep-pocketed industries, but it impacts small business owners themselves. Not just businesses, but also on the public side of things, we see cities, right?

In Georgia specifically, we had a fairly recent case with a city in the north of Atlanta, in the suburbs. Pretty interesting set of facts, the city had a city street, in which a planter had been in the street, since before the city had been incorporated.

Sadly, an individual hit that planter and was injured and that became a lawsuit against the city. And that resulted in a huge verdict against the city. From there, those costs, obviously, they go beyond whatever the city had in place in the form of insurance, if the city had insurance, so on and so forth. That cost gets passed down to each and every taxpayer in that particular city.

Al, you talk about social inflation. Well, I don't think that there's a better definition of inflation hitting a taxpayer than one of these runaway verdicts that are based on a shifting interpretation and shifting legal standards of premises liability claims.

That particular case resulted in about $700 to $750 coming out of each and every taxpayer in that jurisdiction, coming out of their pocket and going to the plaintiff and the plaintiff's attorney in that particular case. All over a planter on the side of a city street that had been there since before the city was even incorporated. But, like I said, these things impact everyone, and it'll impact subscribers to insurance when in the form of premiums that they have to pay that are higher, it'll hit taxpayers who are simply trying to do business in the city or the county. It hits everyone.

We had a rural hospital who had to drop its OB care (obstetrical care) because of their liability insurance, and when they dropped their OB care, their premiums went down, I think, 17 percent. So, that's the only way that the full hospital could stay open.

A family who heard about our tort reform efforts in the news cold-called me to tell me about how they were dragged through a frivolous claim for eight months. This was just a family in suburban Atlanta, and at the end of the day, they got through depositions and discovery, and they finally deposed the plaintiff who was their neighbor. The neighbor had no idea what was going on and the attorney just dropped the case. So, that was eight months of having $111,000 demand hanging over their head that went nowhere, that they had to pay to fight.

I have example after example, especially from our farmers who are working hard to put food in grocery stores and getting food to our tables. I've got restaurants who simply just want to serve the public and provide jobs in these communities.

I've got independent grocery stores in rural communities who — we had a snowstorm recently. One of them opened up and got sued twice. Two lawsuits were filed against them, for instances that happened in their parking lot. That was them just wanting to open up during a tough time for their community because snowstorms are not a regular occurrence here. But they just wanted to open up and serve their community. It is getting out of control here in Georgia. And this year we need to get this tort reform done and provide some stability.

Raising the bar. A call for new standards

ORENDORFF: James, you mentioned something particularly interesting. I think a lot of us know that many of these jury verdicts target organizations that are perceived to have deep pockets.

But what you're saying is that is actually leaching further into the system, and the deep-pocket targeting is actually also affecting businesses that may not have as deep pockets. But it's the environment that has been created that is affecting everybody, not just those organizations perceived to have a lot of resource.

BEAL: Yes, Al, you've nailed it on the head.

You know, when we see these [and] when we hear about the runaway verdicts, if a defendant can't afford it, or their insurance doesn't cover the full amount or what have you, they'll be on the hook for that. But what you don't hear about are these smaller claims, these claims against smaller businesses that are not in and of themselves, a high dollar amount. But when you think about a small business operating on tight margins, it is a huge amount for them.

A $30,000 payout might be huge, and maybe they have insurance that can adequately cover that, but that the cost of that will get passed down in their premiums, and then it'll get passed down to their consumers.

So let me set the stage for you here a little bit, Al, and kind of going back to that reference I made to the CVS case. What that CVS case did was, yes, it was a plaintiff who was tragically injured in the parking lot, when they were involved in some sort of deal with another private individual over an iPad or something.

Then they sued CVS, and CVS was found to be 95 percent at fault in that case. The individual who was injured was only 5 percent at fault, but the shooter was found not at fault at all. They were not considered to be at fault — kind of an interesting case.

But the bigger piece of that was that when that case was appealed up to our state supreme court, they adopted a new legal standard, which doesn't just impact CVS, doesn't just impact large businesses, it impacts the whole state.

And it was a single jury verdict from a single county here in Georgia that now has statewide impact. And so, what you see is that changed the legal standards for what evidence you can introduce that makes it more difficult for a defendant — AKA, that business — to go to court to have a fair shake. And you will have an attorney, a plaintiff's attorney, who will use that verdict, and they will go after every business, doesn't matter, small, large, medium, what have you. And they will use that to their advantage in enforcing these settlements. And it could be the most frivolous claim.

So, we talk about frivolous lawsuits. Well, let's talk about frivolous claims. When you have a legal environment that allows for that, then the claims themselves can be frivolous. But, hey, I could roll the dice and go to court and risk a $40 million payout. So that's what we're talking about and what we want in Georgia and what we're seeking is, is to put some statutory framework in place in which judges, juries, and both parties can rely on and provide them with a fair shake in court.

ORENDORFF: You know, you've just done a magnificent job of describing what we alluded to at the very start of the program, the systemic impact of social inflation on the entire justice process. Which is why we're talking about it, which is why we are working to do something about it.

Let's go, let's dive a little deeper here if we could. I understand there's an interesting dynamic playing out that is increasing premise liability cases, especially in states like Georgia. James, what about that?

BEAL: What we're seeing more and more of is when there is a lack of a statutory framework. That's, that means the folks that we elect to the State General Assembly here in Georgia, when they don't speak on something, they don't create policy, they don't put it in statute, then it becomes solely up to whatever story a plaintiff's attorney can make in court, and it will pull on the heartstrings of juries, and the juries do their jobs.

But what we're seeing is because of the lack of these standards in state law, you know, we're seeing more and more runaway verdicts. We're seeing more issues get put in court that probably shouldn't be in court, shouldn't be gumming up the court system. It really, it's either these frivolous claims that then become lawsuits or it's these frivolous claims targeted at certain businesses.

You know, if like me, if you follow some of the jurisprudence here in Georgia, you can see where premises liability is potentially — especially the negligent security claims — excuse me, there's a there is a piece of premises liability called negligence security that we're seeing more and more claims over, and some of these have resulted in lawsuits. Again, these will target deep-pocket industries, but they're trying to use the court system to get at other even more deep-pocketed industries like the franchisors of companies.

You will see, for instance, your favorite fast-food restaurant, your favorite hotel that you stay at, a lot of these are operated as small businesses, but they are franchises. So, they'll try and use these negligent security claims to push the law in their favor in order to pierce this veil and get at franchisors. That's just one example.

“Deep pockets” as targets in premises liability cases

ORENDORFF: Yes, it is a great segue to the next question that is: Are there certain types of businesses that are typically targeted for these premises liability lawsuits? Or can this impact any business?

BEAL: Yes, it can impact any business. And again, when you have deep pockets, you are already a target. We hear — it was just yesterday or maybe this morning actually — there was an article that was put out about a horrific set of facts that were targeted at one specific, very national deep pocketed non-profit. But they have a national presence. They're in every community in Georgia. I think across the country, and what it is, is that there will be a horrific set of facts in which you will feel that someone needs justice on that.

But at the end of the day, when you lack some statutory standards, whatever the outcome of that case is, especially if it's a runaway verdict, so to speak, a big payout, a lot of times that will be appealed because you feel. ‘I didn't get a fair day in court.’

So, anyone that has a large presence nationally — or at least in Georgia — is potentially a target for these. And that's why it is so imperative that we get tort reform done this year.

ORENDORFF: Rebecca, one aspect of this issue that we haven't touched on yet, is insurance fraud. From a claim’s perspective, how much of an impact is this having on making a bad problem worse?

FOZO: I think you said it exactly correctly. I think this is making a bad problem worse. Many of these claimants who will create a horrific set of facts, like James was talking about, will stage something like a slip and fall accident on a property.

A lot of times they'll actually scope out the area before they have this fraudulent accident, or maybe they'll see there's not a lot of traffic in the area, or they know there's no surveillance cameras, or maybe the surveillance cameras aren't working, and they'll actually have somebody fall there over something that would a lot of times be considered an open and obvious defect, something that they can see.

Then they'll actually fall and create a claim, and then they'll have this other person witness another person's accident. So, there's a whole segment of these fraudulent types of claims where, yes, certainly you do feel bad for the injured person, but the conditions under which these claims were created are simply fraudulent.

Implementing effective risk management strategies for navigating legal challenges

ORENDORFF: As difficult as this issue is, it is not without solution. So, I wanted to kind of wrap our conversation today by asking what can be done about this?

FOZO: Well, I can definitely chime in on that from risk management. Some practical tips, some considerations to do if you're a company and you do have certain policies or procedures in place, make sure that your employees are aware of those policies and procedures. Make sure you're documenting in compliance with those policies and procedures. And one thing that we are noticing is that juries want to see a video of an accident.

We're just so accustomed to seeing videos now in this day and age, make sure that your company is retaining the video footage. And I would suggest not just of the accident itself, but the 24 hours before and the 24 hours after. And I know that seems like an awful lot of video footage, however, we're starting to see more and more judges allow that type of request. It would behoove your corporation to be able to produce a video that maybe has really nothing on it than to face a potential spoliation of evidence claim, where the plaintiff's attorneys are definitely going to say you intentionally destroyed the evidence, and then you have to face the jury with that particular issue.

ORENDORFF: Yes. Which puts you behind the eight ball at the start.

FOZO: You got it.

ORENDORFF: James?

BEAL: Yes. I can talk a little bit about what we're doing here in Georgia and that may be impactful to other listeners in other states. In Georgia, we have been fighting for meaningful tort reform for many years. This year, we have our Governor Brian Kemp and our state senator who is also the Senate President John Kennedy, both leading the way to get this done. And Governor Kemp stepping up and taking this issue on has been a game changer here in Georgia, and [we] very much appreciate him taking this on.

It's been a multi-year effort for him, as well. What he decided to do, and what the general assembly decided to do was gather insurance-related data from our insurance commissioner and review that to not only start talking about it, but to have data that backs up the anecdotal stories that we hear and the story, the folks that come forward and say, "Hey, this is where I got hit with this claim. This is why the cost of doing business is so high. Here's why I can't get insurance anymore. Here's why I had to fortify my parking lot and make it more difficult for customers to come onto the property, so on and so forth."

So, we have the data now to back up the stories. I think that was a very wise move on the part of our governor. But at the end of the day, I can't tell you how many groups I've told this same thing to, but folks in the state capitol here in Georgia, we've done everything that we can to highlight this as a problem, to overcome the most special interest in this building who want to see nothing changed. And it's hard to negotiate, it's hard to come to a deal, so to speak, with a side that doesn't want anything to change.

And that's what we see from trial lawyers. So, what we have done here, we have put an emphasis on grassroots efforts. And if any of your listeners are here in Georgia, or they're seeing issues in their own states with they're hearing from their policy holders their clients, so on, or they see it themselves, maybe they have a side business, a bookstore, or what have you, something on the side, if they feel that they can't rely on the law to protect them from frivolous claims, frivolous lawsuits, then they should get engaged. They should find out who their state leadership is, who it is here in Georgia, and start that grassroots effort to reach out to their legislators.

That has been a true game changer. We have our next subcommittee hearing tomorrow in the Statehouse. We're going to have some good folks come and not just talk about the legal aspects of the bill, but also to share more stories about how difficult it is for them to navigate our current legal environment here in Georgia. I'm confident that we can get something done, not only because of the efforts of our governor and of Senator Kennedy, but also because of just the grassroots engagement here in Georgia.

ORENDORFF: An issue that drains resources also requires resources to fight it. An outstanding conversation today. Thanks to James Beal, the Executive Director at Georgians for Lawsuit Reform, and Rebecca Fozo. Claims Judicial & Legislative Affairs Assistant Vice President at Zurich North America.

And thank you for listening. If you like the show, leave a comment or review wherever you get your favorite podcast, or you can drop us a note at media@zurichna.com. All of our social inflation episodes are available at zurichna.com. This has been Future of Risk presented by Zurich North America.