The law does not require businesses or individuals to take measures to prevent all foreseeable harm to customers. For example, an insurance agent needs only provide coverage that a client requests and does not have to anticipate every need.
However, courts around the country recognize that a proprietor’s duties may go beyond what the parties dictate in a contract when a special relationship occurs.
Examples of special relationships
Business contracts stipulate the services and products an establishment renders in exchange for compensation. Companies do not have to go beyond the agreement’s requirements unless a client is vulnerable and somehow dependent on the business. In such cases, the operation has a duty to protect the client from foreseeable harm.
Industries that commonly form special relationships with customers include the following:
- Child care and senior caregiving
- Hotels and landlords
- Medical care
- Legal services
In such businesses, a client can claim negligence on the part of the establishment if the entity does not take affirmative action to protect the clients from foreseeable harm. For instance, a hotel must resolve potential hazards on its property.
Exceptions and rare cases in insurance
Various courts have ruled that insurance brokers may enter into a special relationship with clients. For example, a business owner might discuss the purchase of a new property with an agent and request advice on how to insure the acquisition. The agent must not neglect to demonstrate how the client can adequately insure the premises or potentially face liability.
However, court decisions show that such cases are exceptional, and a brokerage that markets its experience and ability does not come under a special relationship.
Such examples show the wisdom of understanding a business agreement. Clients who suspect a breach of responsibility should be aware of their own obligation of disclosure.