General liability insurance is a basic type of insurance that all businesses should have. It protects your business from claims of liability in bodily injuries, property damage, and personal and advertising injuries. Without coverage, the costs of these incidents can become astronomical.
Even with a complete policy, you should still take steps to prevent negligent events. Lowering risk saves money on premiums and maintains your company’s good reputation. Here are some of the most common types of claims made against liability insurance and steps you can take action to avoid them.
Customer Slips, Trips, and Falls
If a customer sustains an injury on your business property, you can be held liable for their resulting medical expenses and even lost wages. It is your responsibility as a business owner to take all reasonable steps to make a storefront or other business space safe.
While bodily injury coverage in a general liability policy will help with these costs, making your workspace safer will reduce your liability. A wet floor that has just been mopped, for instance, should be clearly marked. An object left out on the floor or a crack in the sidewalk can cause a trip and fall, so you should fix these hazards as soon as possible and clearly mark them with bright colors and signs when repairs or cleanup is in progress.
You can also prevent a lot of unnecessary bodily injury by making sure your employees are trained in safety and supervised. Always keep equipment and facilities well maintained and in good repair.
Damage to Rented Property
Property damage is another major component of general liability insurance. A complete policy should cover damage to premises rented to you if you have a rented office or another type of workspace.
For example, a policy will typically cover fire damage to a rented space. Fires can be catastrophically damaging, so take steps to avoid them. Make sure workers in kitchens, for instance, are trained in preventing fire. Keep necessary safety equipment on hand, such as fire extinguishers.
Damage to a Client’s Property
Another aspect of property damage coverage is for a client’s property. For instance, if you have a contractor business and a worker causes water damage to a client’s home when installing a new kitchen, this will cover the costs of repairs. These claims can get costly, so take steps to avoid client property damage:
- Only hire employees highly qualified to do the work offered by your business.
- Train all employees to do the work properly and to minimize the risk of damage.
- Provide supervision for new employees until they are fully trained.
- Keep business equipment well maintained.
- Keep records of all work done, inspections, repairs, and maintenance.
- Ask clients to sign a waiver that warns them of the risks of the work you are doing for them.
Personal and advertising injury in general liability policies cover instances of copyright infringement. For example, if you use a photo on your website without permission from the photographer, they could sue your business.
To avoid copyright infringements, be cautious when using work that is not original to your company. Understand the usage rules for material that you do not own and follow the necessary steps to get permission.
Reputational harm (as well as other forms of advertising injury) is one of the costliest of general liability claims. There are two main pitfalls you may encounter that can get your business into trouble:
- Libel– It’s considered libel if you make a defamatory statement about someone or a company in writing. An advertisement, for instance, in which you claim a competitor’s product is defective, may be libel.
- Slander– Slander is a spoken statement. So, if you make a claim against a competitor in a radio or television interview, that could be slander.
Your competitors can sue you for reputational damage in the case of libel or slander. Avoid these situations, be careful about what you say about others. Never state anything that you cannot prove to be true. Train your employees in avoiding these kinds of statements as well.
Minimize Harm to Reduce Insurance Costs
You should have full general liability coverage for your business, no matter how careful you are. It is still important, even with good coverage, to minimize risks. Doing so will save you money and your business’s precious reputation.