If a customer trips on your carpet, slips on a wet floor, is injured on your equipment, or feels offended by your social media efforts, they could bring a lawsuit against your business. There are so many potential risks to your business for a lawsuit that you probably could come up with ten just by looking around you right at this very moment.
Whether your business is at fault or not, the cost of your legal defense (and possible settlement) can add up fast.
General liability insurance covers the cost of legal expenses if your business is sued by a third-party (non-employee). The types of lawsuits that general liability covers can include:
- Property damage
- Bodily injury
- Copyright Infringement
- Product Liability
- Accidents on your Property
- Reputation Damage (slander/ libel)
- Non-Owned (rented or hired) Auto
The average cost of a slip and fall claim for a small business is $20,000. And that’s just one small incident, one wet spot on a floor, one spilled beverage. (One dropped banana peel!) Compared to that figure, the cost of a general liability insurance premium is minimal.
You can keep the cost of your general liability insurance nice and low if you can avoid these incidents, and the resulting claims, from occurring in the first place.
Here are some ways your business can avoid a general liability claim.
Some businesses are riskier than others. But putting safety first is always a good idea, no matter what industry you are in. The safer you make your workplace, the less you have to worry about causing injury or harm to someone.
- Keep up to date on the safety standards for your industry, equipment, or products.
- Maintain a clean working environment, free from clutter, fire hazards, and trip/fall hazards.
- Make sure that exits are clearly marked, and that there is adequate lighting during operating hours.
Making workplace safety a priority will reduce the risk of an accident that can injure a customer or other third-party.
Training your employees in appropriate workplace safety and conduct can go a long way towards preventing a lawsuit. Even if you are running a business out of your home, with one part-time employee, you can benefit from training her/him to prevent accidents, damages, and lawsuits. If you have employees, you are responsible for their actions, and words, at the workplace.
When you have an employee handling your social media accounts, marketing efforts, or acting as a representative of your business, you will want to make sure they are up to speed on the next tip, which is...
Market Yourself with Care
In today’s digital marketing world, where every business has a website, social media accounts, and access to Facebook ads, it can be very easy to make a costly marketing mistake. If you inadvertently damage the reputation of a competitor on your blog, podcast, or social media accounts, you could be facing a lawsuit for libel (written defamatory statement) or slander (spoken defamatory statement). Whether you manage your marketing efforts yourself, or have an employee or service do it for you, make sure you don’t try to boost yourself up by tearing a competitor down.
By the way, speaking badly of clients is just as dangerous as talking down the competition. If you say (or write) something that could cause reputational harm to a client, you could be facing a lawsuit.
Avoid Copyright Claims
Another way you can avoid a lawsuit as the result of your marketing efforts is to steer clear from using other people’s images or names without consent. Celebrities may be public figures, but that doesn’t mean you have the right to use their name or photos without permission. While it may be fun to put a pic of your favorite teen pop-queen on your company’s blog post, complete with a funny caption using someone’s image without permission can send you straight to court to defend a copyright claim.
Make sure that you have permission to use the images, music, videos, writing, and content that you use for business purposes.
Use Special Care with Customer Property
You may operate a mobile auto detailing business, cleaning customer cars at their homes and offices. You may repair computers, watches, shoes, or furniture. Whatever your business, if you have customer property in your care, control, or custody, you could be liable for damage. If you are in a position to handle customer property, you need to create a procedure and policies for how to do so safely.
Proper procedures for handling customer property may include:
- Documenting the condition in which you received the property.
- Carefully handling property to reduce the risk of damage.
- Deciding how and where property is stored when in your care.
Once you’ve determined the procedures for handling customer property, make sure your employees are trained and adhere to your policies.
Communicate Openly and Honestly
When you are providing a service or product for a customer, keep them in the loop as much as possible. Client’s who feel included in a conversation, listened to, and aware of what is happening are less likely to sue. Treat your clients with respect, keep the lines of communication open, and be honest in your interactions with them to reduce the chance of them feeling slighted (or damaged) by you and your business.
Reducing the risk of damage and harm to a customer, client, or other third-party person takes time, as well as some good old fashioned policies and procedures. But your efforts should payoff in the form of avoiding general liability claims for your business. The less claims you file, the lower your insurance premium rates will be, which is just good for your bottom line and your business.