There are many potential benefits to sharing an office space with another business. Clearly, you can save money on rent and split the cost of essentials like internet and phone service. You can even share personnel such as receptionists, office assistants, and secretaries. It is important to understand, however, that sharing office space can also result in unforeseen legal liability in certain cases. As a result, it is important to identify these potential sources of liability and make sure that you and your business are insured against any risks that may exist.
Due Diligence: Investigate Your Potential Office Mate
Before you agree to share an office space with another professional or business entity, it is important to conduct a due diligence review. You should confirm and review your potential office mate’s credentials, licensure status, reputation, references, credit rating, and any other information that may be relevant to your business relationship.
Should issues arise with your office mate in the future, the fact that you conducted a thorough review will shield you from any claims that you knew or should have known about any issues that may have existed at the time you agreed to an office sharing arrangement.
Consider Vicarious Liability
If you share office space, support staff, and other employees, it is possible that you may be viewed as a single rather than two distinct business in the eyes of customers, clients, and importantly, the courts. If courts choose to apply a doctrine known as vicarious liability, you could be responsible for any liability incurred by your office mate even though you had nothing to do with the act or omission that resulted in the liability. It is important to note that this can happen across professions and industries – for example, a lawyer could incur liability from sharing space with an accountant, just as a chiropractor could incur liability from sharing office space with a music teacher.
Call Today for a Quote
While an office sharing arrangement can make sense from a financial perspective, it is important to make sure that you are covered in case your office mate incurs liability that may be imputed to you. As a result, if you are considering sharing office space or resources with another person or business, you should conduct a thorough review of your insurance coverage. Our professionals can help identify any gaps in coverage that you may have and make sure that you are fully protected. To learn more, call Berliner-Gelfand & Co. Inc. today at 203-367-7704.