One sure-fire way for a business to get sued is if a visitor – a customer, vendor or any third party – injures themselves while on your premises.
Injury lawsuits can be costly, with outlays for medical costs and potential lost income if the injured party misses work, punitive damages if the case goes to court, and legal fees. Even if you prevail in the lawsuit, you’ll still be out significant sums for your lawyers.
That’s why it’s important that you have a two-pronged approach that comprises maintaining a safe facility and having a commercial liability insurance policy.
Your risks
Whether you own your building or rent it, once someone steps into your facilities or jobsite, you have a duty to make sure they are safe.
Someone who injures themselves in a facility a company rents would likely go after both the landlord and the tenant (you), but if they are in your offices and not a common area in a larger building, you would likely be the main defendant.
Also, many landlords have clauses in their contract that require tenants to assume full responsibility for maintaining safety in the areas they rent.
Besides someone slipping and falling on your premises, there is a host of other liability risks that you may face, including:
- A visitor or an employee assaulting another visitor.
- A visitor being injured by machinery or equipment.
- Someone being hit by a vehicle in your parking lot.
How to protect visitors
You should take all steps necessary to protect everyone who enters your premises.
Besides that, you should do the following to make sure your facilities are safe:
Inspect the facility – Form a committee with employees from each department to inspect all areas a visitor might enter.
The committee should do monthly walk-throughs to look for any safety issues, paying particular attention to walkways and other areas that outsiders may access. The main focus should be to ensure those areas are uncluttered and free of tripping dangers.
These walk-throughs should be done at varying times of day to account for different activities during those times (such as a janitor mopping the floor in the early morning).
Training – Train your employees to keep walkways clear at all times and practice workplace safety.
Make corrections – Once you find an unsafe condition, correct it immediately. If you can’t address it straightaway, you should cordon off the area until it can be tackled and put up warning signs.
How to protect your business
To cover your business, the first step is to purchase a basic commercial general liability insurance policy.
Most CGL policies will cover many of the expenses of a premises liability lawsuit, including legal costs and any settlements or judgments, up to the limit of the policy. If someone is injured and doesn’t file suit, the policy will pay for their medical expenses.
Premiums are calculated based on a number of factors that affect your risk picture:
- Location (city, state, region)
- Industry
- Size of your company (larger companies tend to pay more for coverage)
- Claims history
- Policy coverage limits
- Deductible (a higher deductible means a lower premium, and vice versa).
For a basic $1 million CGL insurance policy, a business may pay anywhere between $300 and $1,000 a year depending on the above factors. Most policies are sold in $1 million increments. If you need more coverage than the insurer is willing to underwrite, you can purchase a separate umbrella policy.
