From a risk-management perspective, which business organization's form protects owners from personal liability for employee torts?

A corporation provides the strongest protection for owners from personal liability for employee torts due to its distinct legal status as a separate entity. When a business is structured as a corporation, it shields its owners—typically referred to as shareholders—from personal responsibility for the company's debts and liabilities, including those arising from torts committed by employees in the course of their work.

In the corporate structure, the liability is confined to the assets of the corporation itself. This means that if an employee commits a tort—such as causing an accident while performing their job—the corporation can be held liable, but the personal assets of the owners or shareholders are generally protected from being seized to satisfy any judgments or claims made against the corporation.

This protective feature is essential in risk management, as it allows business owners to limit their financial exposure while engaging in entrepreneurial activities. On the other hand, other business forms like partnerships and sole proprietorships do not offer this same level of protection; owners in these structures can be personally liable for the tortious acts of their employees, which can expose their personal assets to significant risk. An LLC can also provide limited liability similar to a corporation, but it is important to recognize that the question specifically highlights the protective characteristics of a corporation.