Protection from Tort Claims

Except for professional malpractice cases, when the source of the lawsuit is a negligence claim or a claim arising out of the employer-employee relationship, the corporation can be an effective device. We have previously discussed how an employee’s negligence may be imputed to his employer. If your secretary injures someone while she is picking up your lunch, you are likely to be responsible for the damages. However, if the secretary is an employee of a corporation, the corporation, but not the officers or directors, will be liable for the injury. This is also the case generally for employee claims of discrimination or wrongful termination. Any such lawsuits will be filed against the corporation as the employer. The principals of the company will not usually be held personally liable for these types of activities.