Business liability and risk apply to each and every business in each and every avenue. No matter what your business is, there is some form of risk management needed, or liability to properly understand. It’s critical to comprehend the exposures your business will face, what helps and doesn’t help, and the best techniques to employ when it comes to risk management.
First of all, no matter what sort of signs you may have on your business (No Parking, Tow Away Zone, Warning, etc.), it does not exclude you from liability. These signs will help your case, but remember: anybody can sue anyone for anything (and these days, they typically do). Putting a sign up doesn’t mean you can completely ignore certain risk areas of your business, because even if you are the business owner, you don’t get to decide whether or not you’re liable for something. That’s up to the court system, if it comes to that.
As for those risks you and your business will be liable for, there are three big exposures to consider:
1. Your place/premises.
Is your physical place of business safe, or does it need work? On your premises, there are also three different types of people to consider.
Invited persons. There are people you invite, be it through advertisement or some other form of business endeavor. Clearly these are the people whom you have the highest responsibility to protect.
Licensees. The second group of people are licensees, or people allowed to be on the premises but not people you necessarily invited. These are vendors, meter readers, people of that ilk, and you don’t have the same amount of duty to protect them.
Trespassers. The third type of people are trespassers, and of course you have zero responsibility to protect their interests as they aren’t invited on your property.
2. What you do/are doing.
Are you a roofer? A fleet company? An accounting firm? Depending on your type of business, you may have a higher or lower risk of injury or damage. There is a sliding scale, so find out where you belong when deciding on your insurance.
3. Things you decide or say.
Your board of directors, if you have one in place, may decide certain things which affect the daily operation of your business. Be familiar with your public statements and positions.
Not everything is insurable. Remember this when it comes to risk management. Insuring your business is an important tool when it comes to managing risk, perhaps the most important tool, but it isn’t all-encompassing. One of the best ways to manage risk is to avoid risk. For example, a person can avoid the risk of dying while skydiving by simply not ever skydiving. That sort of mentality applies to risk within your business.
Before purchasing insurance, put whatever risk management items in place to make sure your business is attractive to agencies. Sprinkler systems are probably the biggest and most effective loss-control item to have in your building. If you have a construction business (roofing, home building, etc.), having all of your workers in steel-toed boots, safety goggles and/or hard hats goes a long way in making your business fit.
Getting fit for an insurance company is a great way to approach purchasing insurance. Is your business safe? Are the employees protected? Do you know where you stand, and what you need? Get fit, and purchasing business liability insurance will be much easier.
Ryan Hanley is the Vice President of Marketing at TrustedChoice.com and the Managing Editor of Agency Nation. He is also a speaker, podcaster and author of the Amazon best-seller, “Content Warfare“. Ryan has over 10 years of insurance expertise and blogs frequently to help consumers understand complicated insurance topics.