New Legal Duty of Care for Disaster Preparedness for Businesses

New Legal Duty of Care for Disaster Preparedness for Businesses

Disasters during the past decade have forever altered legal counsel's role in small and large businesses alike. In addition to traditional areas of responsibility -- such as corporate governance, financial risk, and personnel, counsel must now plan carefully to ensure company programs are created, executed, and monitored, including ensuring that corporate programs meet minimum disaster preparedness requirements.

Mr. Zeichner writes: In late 2009, the Department of Homeland Security (DHS) launched a formal review of disaster preparedness standards and is expected to support a new voluntary program aimed at certifying compliance with community standards. As a result of this process, national standards for disaster preparedness are being reviewed by the Federal government potentially leading to new legal responsibilities for the business community.

If adopted in their current form, the proposed standards may impose a legal duty of care on owners and operators of business institutions covering several major areas of disaster preparedness. The imposition of a legal duty on business reflects a dramatic departure from existing best practice and could lead to lawsuits in negligence, equally affecting both small and large businesses.

At least one of the proposed standards explicitly describes a “duty” owed by business owners to a range of stakeholders, such as customers and shareholders. Other community standards under review by DHS do not reference a “duty” explicitly, but detailed descriptions of preparedness activity suggest an evolving legal responsibility of business owners to adopt and implement emergency preparedness activity.

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