You’ve checked liability insurance off your list. Your policy is in place. You’re fully covered if you’re hit with a liability suit. That’s great news.
However, wouldn’t it be nice to avoid liability claims altogether? While it’s vital to have insurance to pay any liability expenses you incur, it’s even better to avoid the claims in the first place.
According to insurancejournal.com, reputation damage tops the list of the most costly small business insurance claims, and resolving these claims costs, on average, $50,000. Number four on the list is product liability, and number five is customer injury or damage.
However there is good news: You can take steps to avoid making a claim under your liability insurance simply by reducing your liability risks. Instituting a comprehensive risk-reduction program can save your company time, money, and damage to its good name. With the following suggestions, you can lower your risk and save significantly on liability costs:
Employee training: Do you have the proper safety training programs in place? Make sure your employees are well trained on general accident prevention and response as well as industry-specific safety issues. This can go a long way in stopping liability issues before they start.
Safe surroundings: Regularly inspect your workplace for safety issues. Ensure you have sufficient lighting in stairways and entrances. Repair tripping hazards on floors or stairways. Clean up spills or wet areas immediately. Regularly review outdoor areas and take action if issues are discovered. Repair parking lot potholes and clear trash, debris, and slipping hazards. Small fixes can have a huge positive impact.
Mindful marketing: In today’s world, advertising and marketing are essential. With the slew of social media and other digital options available, businesses can deliver a constant stream of advertising to customers and potential customers. But as you market yourself, take care to avoid liability issues. Don’t slander a competitor (or a client) and don’t make claims you can’t support.
Copyright warnings: In designing advertising, many companies have accidentally stepped into copyright issues. Be careful when quoting others or using images or logos, and get permission for testimonials before you publish them. It’s easy to repost or “borrow” content, but that can just as easily land you in a liability suit.
Property care: Do your operations involve customer property? Do you offer a service at their homes or provide customers with in-store repairs? If so, have policies in place that protect both you and your customers. The goal is to establish careful procedures for handling customers’ property. Two suggestions: consider having them sign a waiver before services are performed and/or document the condition of their property before and after services are rendered.
Customer service: Communication is key. When you’re open and honest and clearly communicate with customers, you’re more likely to have a healthy relationship with them. This may mean they’re less likely to sue. Make the extra effort to keep customers in the loop and follow up with them, and try always to exceed their expectations.