The Real Financial Cost of Being Negligent

Negligence is when you, as a company, do not take care of individuals needs that should be taken care of, which results in some form of harm. Negligence claims are becoming a growing threat as people often underestimate the very real cost of being negligent. But what exactly is negligence, and how can businesses stop it from happening?

Negligence in Detail

There are certain situations where a company can fail to take proper care of an employee, client or even asset and it is not negligence. When anybody is assessing whether the case is actually an issue of negligence, they need to assess several areas:

Actual Cause
Proximal Cause

The difference between actual cause and proximal cause is that the proximate cause is that which legally causes the negative event, whereas the actual cause is the straightforward immediate events leading to the negligence. For example, a barista giving a customer a burn by pouring scalding hot coffee on them is the actual cause, but the proximal cause might be the owner of the coffee-shop designing the hand-over area in such a way that that accident is inevitable.


Clearer examples of negligence are a mechanic giving the all-clear on a car that is, in actual fact, dangerous, or a doctor causing harm to a patient due to an error caused by laziness. These are cases where mistakes shouldn’t really happen, where the gravity of the situation and the possible damages should ensure there are checks in place to eliminate the possibilities of these from happening. There are cases, however, where mistakes may be more common, and in those cases, there are often warnings of the risks of error or harm, which can reduce the case for negligence. An easy way to picture this is somebody with a nut allergy eating a product marked with ‘may contain nuts’. That would not constitute as criminal negligence.

The Costs

Claims relating to negligence can and do cost businesses many thousands of pounds. There are complex acts of negligence, such as disclosing information that could put somebody at risk, which can warrant lawsuits of many thousands depending on the extent of the risk. A common area where businesses lose money due to negligence claims is when they don’t take adequate care of their employees and put them in danger. These are particularly expensive to deal with, as those employees seek the sort of work accident advice available here, and discover that they can take legal action on a no-win-no-fee basis.

There are also less quantifiable costs that a company may suffer if they have been negligent. One of the most common is the damage to a company’s reputation. Lawsuits can sometimes be highly publicised, especially if they involve a lot of money or if they involve a lot of damage. Nowadays, the effects of this publicity are widespread due to social media. Even if a local business is negligent to a customer or employee and no legal action is taken, word of the negligence can get out and tarnish the business’ reputation. When that business is small and local, such reputational damage can be highly costly.