Note that this writeup is for the United States.
Conventional wisdom has it that if someone falls on your property, they can sue you for millions. You're out in the cold, and all because some dumbass couldn't look where they were going.
It probably won't surprise you to find out things don't actually work that way. Instead, all lawsuits based on accidental injuries are covered under the rubric of negligence.
That is, if you were negligent in your actions, and those actions caused injury to someone else, then you have to pay up. But if you didn't do anything wrong, you owe nothing. Not even if they fell on your property. Not even if you hit them with your car.
The question, then, is,
"What is negligence?"
Negligence is the failure to take due care in your actions. You have an obligation to others not to go around willy-nilly, half cocked and dangerous. If you're going to do something, you need to do it in a way that isn't unduly dangerous to others.
That means, for example, that you don't drive blindfolded. It also might mean that, if you're going to invite people to walk through your store all day, you need to make sure it doesn't have any hidden dangers. Put up a "Wet floor" sign if you're mopping a floor that becomes slippery when wet.
Of course, there are limits to the safety measures you want people in society to take. Putting up a "Wet floor" sign will prevent some falls, but there would be even fewer falls if we forced a business to shut down while mopping. But that seems a bit extreme, and it's not the kind of thing we want to force people to do.
Instead, the question you need to ask is whether, under all the circumstances, a "reasonable person" would have taken some precautions the defendant failed to take.
So would a reasonable person put up a sign to let people know the floor is very slippery? Yeah, probably. The cost is very slight, and the damage it prevents seems worth it. Would a reasonable person drive only at 3 mph, to make sure they never hit anyone? Probably not. The costs to this are huge, while the risk of hitting someone on any given day are relatively slight.
Learned Hand and BPL
This weighing of the costs and the benefits of taking a particular precaution were famously put into equation form by Learned Hand, probably the most important judge never to make it on the Supreme Court:
If P is the probability some kind of accident will occur, B is the burden of taking a precaution to prevent it, and L is the liability (damages) that will result if an accident happens, then not taking a precaution is negligence when
Take a second to see what that means. If the precaution costs a whole lot, but the accident is relatively improbable and slight, then you don't have to take the precaution. But if it's the other way around, if the burden of the precaution is slight, but the risks it avoids are large, then you do have to take action.
This is a basic expected value formula, if you know game theory. It's the point at which, in the long run, taking these kinds of precautions will be cheaper to society than not taking them.
Muddying it up a bit
There's more. Quite a bit more, actually. I'll mention some of the problems, but they can get quite a bit complicated, and go beyond the scope of this writeup.
What if both parties to an accident, the defendant and the plaintiff, were negligent? Who pays then?
- Both do. Juries say what percent of blame each party has, and the damages get split up that way. (Webbie has an outdated reference to contributory negligence below, which was a different rule. What we have now is called Comparative Negligence.)
What if three different people were negligent, all of whom caused an accident to occur to an innocent fourth?
- Any one of them is liable for the damages in full to the innocent party. Different jurisdictions allow that defendant to claim some of the loss from the others, but the innocent victim doesn't worry about it.
What if it's a doctor that was negligent?
- Ignore these rules for doctors. There's an entire body of law (Malpractice), that exists solely for professionals.
On and on and on...
If you're interested in the topic, I can't recommend enough the book The Forms and Functions of Tort Law, by Kenneth S. Abraham. It manages to cram all of tort law into a slim 150 pages or so. I don't understand how he did it, but he did.
As always, /msg me if you have a specific question.
eliserh says re Negligence: I think there's actually some division on comparative vs. contributory. If I remember correctly, there are actually a few states left that use a contributory negligence defence in some cases.