As a business owner, it’s important that you take full responsibility for everything that happens on your watch. While you may have a clear understanding of right from wrong, the same doesn’t always hold true of your employees. Honest mistakes can and probably will happen every now and again.

Depending on the circumstances, you may find yourself in hot water for a mistake that an employee made. Keep in mind that this is all part of owning a business, and the employer, not the employee, is typically held liable for misconduct.

There are two things you need to know:

  • Employers direct their employees: Even if it’s not 100% true, employers typically direct the behavior and decisions of their employees. Subsequently, they’re required to share in both the good and bad. As a business owner, you benefit from the work that your employees do. But on the flipside, this also means you have to take on the legal liability if they do something that results in harm.
  • The employer is most likely to pay: In the event that an employee makes a mistake that harms another individual, such as a consumer, the company is more likely to pay than the employee. The legal system is designed to make things right for the victim, and placing liability on the employer, as opposed to the employee, is the best opportunity for making that happen.

It doesn’t matter if you have one employee or hundreds, you should have a clear understanding of what they’re doing at all times. This doesn’t mean you want to micromanage, but a beat on all departments allows you to reduce the risk of serious mistakes.

Keep this in mind: Just because an employee makes a mistake doesn’t mean it will financially harm the company.

In order for this to happen, another individual or entity must have suffered financial loss as a result of the mistake.

If you’re concerned about liability, look into the many things you can do to reduce your risk. For example, provide your employees with all the training they need to do their job.

Should you find yourself tied up in a lawsuit, it’s time to learn more about your legal rights and how to best defend your company.