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Don’t Get Tripped Up by Public Liability

Introduction

My wife’s recent fall at her favorite Taco place is an illustration of the premise liability risk that most businesses have. Your business has a legal duty to provide a reasonably safe accommodation. Many claims for retailers, restaurants, garages and other “Open to the Public” businesses are driven by a client tripping on premise and being injured. If your premise presents an unusual or heighten hazard to someone venturing onto it, whether customer, supplier or passerby, your business is venerable. This article presents some examples of premise hazards and a guide to how to inspect your property to reduce this risk. Liability coverage for premise or “Public liability” is an important component of the General Liability business insurance contract.

Author, David Crump

Author, David Crump

A Couple Public Liability Examples

Like any veteran insurance salesman, I have my “war stories” of what can happen. Per Dragnet, the events are true; only the names have been changed (actually omitted) to protect the innocent. Here are some:

During a site inspection of an apartment complex, I nearly put my foot in a hole resulting from settling of a utility access port in a sidewalk. This could have easily broken an ankle. As the property owner, you could be held liable for this clear hazard.

At the same apartment complex is a pen with a large aggressive dog owned by a tenant. While the enclosure is marked “Beware of the Dog” (an admission of the potential danger) it presents a very high hazard for children or other residents. As I approached the area for a picture, the dog charged the fence. As the property owner, you could be held liable for allowing this clearly aggressive dog on your property (the apartment manager had given permission for the enclosure).

At a chicken restaurant I insure there was an incident where a client tripped in a divot in the parking lot. A great ruckus then resulted with screaming and accusations. A substantial lawsuit was filed for the injury, pain and resulting lost wages. The claim was defended by the insurance company with the only settlement offer for direct medical bills. Claim investigator suspected that the injury was staged for the purpose of causing a lawsuit.

A recent visit to a client’s restaurant illustrates another sort of lawsuit risk. Lunch was great, but a visit to the “necessaries” demonstrated a lack of reasonable care with a bottle of caustic cleaner in easy reach. How large would the lawsuit be if that cleaner was swallowed by a child?

Parking lots are a high risk area for shopping centers. A motorcycle hits pavement damaged by undercutting after a freak rainstorm throwing the rider and heavily damaging the bike. A broken handicap sign mount is tripped over resulting in a shopper’s injury. A center is accused of running lawn sprinklers during freezing weather causing a shopper to slip (this was successfully defended as the sprinkler’s water had been turned off for the season).

My favorite Asian Fusion lunch buffet has just washed the front entrance to the restaurant just as the lunch crowd arrives. You bet this slip hazard should have been marked.

Self-Inspection

Most insurance companies offer Loss Control surveys and these visits should be welcomed. Reducing a hazardous condition benefits both the insurer and you, the business owner. Injury to a patron and a resulting claim can result in loss of reputation, loss of management time and increased future insurance costs among other things. Any claim that can be avoided with good management is money saved. Be warned, however, that the loss control “recommendations” are typically enforced and the underlying problem must be quickly corrected.

Store / Business Premise

Start at the front and envision a customer walking to your business.

As the business owner, the “buck” both starts and ends with you. Often I find that a business owner is overloaded running the business and fails to see the business from the public area, the “front of the house” in restaurant jargon. Follow the path that your customer traverses beginning with your parking lot. Don’t miss looking over all the areas that your customers can reach while the business is open. Think like an elderly person — what would cause someone unsteady on their feet to fall? What uneven surfaces exist that can be fixed or at least marked? What can be reached by a child (think poisoning)? Have a friend help you see your business’s public areas with fresh eyes.

Something that I suggest is an annual liability checkup with your lawyer. Think of it as your annual “legal physical,” like a medical physical, to find problems early and treat them pro-actively. Do you have the insurance liability limits and coverage needed to properly protect your business? What can be done to reduce the risks of lawsuits, including the premise hazards? What business practices are helpful to defend a lawsuit if it were to erupt? For example: marking wet floors with warning signs and having a management procedure to record incidents if they occur. Your lawyer is the “doctor” of lawsuit medicine; ask for his/ her advice.

Ask your insurance agent for a Loss Control survey self-inspection guide. The insurance business has had many years of accumulated wisdom on what can cause claims. Take advantage of this resource. Better still, request your insurance agent to visit and help you survey the business’s public area and check for other potential hazards.

Summary

You can’t remove every possible premise risk. A general liability insurance policy is an important component of handling your “Public Liability” and necessary protection. Look at your business from the “Front” public areas and remove any hazardous situations when possible. Take advantage of your insurance and legal resources to find best management practices to reduce your premise risks. Proactive prevention from trip & fall lawsuits and other premise liability risks can reduce your business insurance cost and help keep your business profitable.