How to Avoid General Liability Insurance Claims

Introduction

Every business, big or small, encounters a wide range of risks. While a proper commercial general liability insurance policy, or CGL, may cover most claims, prevention is always the best strategy for protecting your business. Even if your insurance policy recuperates damages, lawsuits are stressful, time-consuming, and often detrimental to a company’s reputation.

Everything Covered by CGL

Commercial general liability insurance policies cover a variety of known business risks. Though policy parameters can vary, most policies cover the following:

• Bodily Injury to an Outside Party– If your business causes bodily injury to an outside party, such as a customer, client, or vendor, general liability insurance can cover your legal costs and their medical expenses. It also covers mental distress, shock, humiliation, compensation for lost income, and costs for the affected treatment.

• Client or Customer Property Damage– When your employees work on a client’s property, there’s always the chance of causing damage. CGL will compensate for any third-party property damage, including replacement, repair, and renovation costs.

• Infringing a Copyright– If you use someone’s original work without obtaining their permission, they can file a lawsuit against you based on infringement. CGL covers infringement lawsuits, as well.

• Reputational Harm to an Outside Party– A business rival can take legal action against your business if they feel your marketing materials make slanderous claims and jeopardize their reputation. CGL provides coverage for legal expenses against such claims.

• Other Advertising Injuries– General liability insurance covers other advertising injuries, such as misappropriating advertising ideas, slander, libel, and invasion of privacy. Should a third party sue your business for any of these offenses, your policy will help cover your legal defense costs.

Doing Your Due Diligence to Prevent Claims

While accidents can happen anywhere and anytime, there are a few tried and true strategies that can reduce the chances of your business being sued. Here’s what employers can do to prevent their company from general liability claims.

• Accidents Leading to Bodily Injuries– Making your business workspace is safe and secure is the first step to preventing accidents. It’s your responsibility to keep aisles clear, clean spills up quickly, and respond to any damages around your store or office that could cause harm. All of your team members should know how to spot potential hazards and who to alert to mitigate them.

If your business operates in a cold climate, snow and ice are two of the biggest culprits of third-party injuries and, in turn, lawsuits. Make sure your business has protocols in place for plowing the parking lot, slating icy patches, removing dangerously positioned icicles, and cleaning up slush that people track inside.

• Causing Property Damage– If your employees work on client or customer property, you need to take extra precautions. Make sure that all workers understand the rules and safety protocols for onsite projects. For example, you can provide frequent training sessions on how to operate vehicles or machinery in unfamiliar settings.

Also, it’s in your best interest to document how your client’s property looks upon your arrival before you start any work. That way, you’ll have evidence of the prior conditions should a client take you to court.

• Advertising Injuries– You and your employees need to take extra care whenever speaking on behalf of the company. If your business doesn’t have a public relations professional, consider limiting communications to the public to just yourself as the face of the business.

It’s also essential that you monitor the materials your business publishes, including text, designs, images, and multimedia. Employees on your marketing team should be able to explain how they come up with an original idea. If an article or ad was inspired by something else, be sure to check that original source and make sure you aren’t infringing a copyright or intellectual property.

Risk Management and Mitigation

It’s true that operating a business invites many risks, and it’s impossible to completely eliminate all liabilities. However, there are countless preventative actions that you can take to help mitigate these risks. While your general liability insurance policy will have your back should an accident happen and someone sues, prevention strategies will save you money, time, and effort in the long-run.