A bill that protects small business owners from getting sued.
NFIB member and Missouri state senator Brian Munzlinger introduced a bill to protect small business owners from frivolous lawsuits in product liability claims.
Senate Bill 192 would give business owners and entrepreneurs peace of mind knowing they will not be liable for civil action for harm caused by misuse of a product.
“It’s really a common sense product liability bill,” says NFIB/Missouri state director Brad Jones.
Frivolous lawsuits can be costly to small business, which is why Missouri lawmakers are seeking to end the practice with product liability laws. The problem lies in cases where injury results from improper use of a product. Currently, business owners and inventors can still be sued for injury claims, leaving them vulnerable to expensive costs even if they are not at fault.
“Small business owners are always worried that they are one lawsuit away from losing their businesses,” Jones says. “The really small businesses that get sued just don’t have thousands of dollars lying around to defend themselves even though they are right most of the time. They don’t have the money to defend themselves in these lawsuits.”
While some claims are true, many are false. Businesses that are sued still have to pay the costs to defend themselves, which may inhibit future creativity and innovation.
“We’ve got a lot of entrepreneurs out there who are some of our best innovators,” says Jones. “They come up with some of these products and it can really squelch creativity in this country if they’re afraid that anything they put out there, they can be sued for it.”
To many, this law seems like common sense. Businesses should not be punished when a person misuses their product, and frivolous lawsuits can hamper economic development and job growth.
Rule 11 of the Federal Rules of Civil Procedure are meant to ensure that claims are not without merit. However, business owners who are sued may still need to defend themselves until a lawsuit is deemed frivolous. Businesses may also choose to settle claims rather than litigate and hire a lawyer, but even small settlements can have a serious negative impact on a small business.
Without protection laws against frivolous claims, small businesses can invest in product liability insurance, which may help with some of the legal fees and costs associated with potential lawsuits—but that also comes with its own high cost.
