Commercial liability insurance rates are starting to edge higher after years of flat or declining rates, depending on your market.
A new survey by MarketScout found that general liability, umbrella/excess and professional liability lines increased by 2% in the first quarter of 2019.
Another report by insurance exchange IVANS Insurance Solutions found that rates for business owner’s policies had increased in average of 4.2% in the first quarter from the same period of 2018.
And while it noted that general liability pricing had increased 1.7% in the quarter, rates for commercial umbrella policies (which are excess liability policies) had inched higher by 2.5% from the first three months of 2018.
Companies are often sued for a variety of reasons, depending on their business. It may be a customer who injured themselves on your premises, or one who was damaged in some way by using your product. Or perhaps a client sues your firm for breach of contract, accusing you of failing to abide by your responsibilities.
Liability insurance isn’t enough to protect your business. You must limit your business risks. What would you do if someone slipped, fell and sued your company? Nobody wants to think about this situation, but lawsuits happen.
It comes down to this: a person can’t win a lawsuit unless they can prove to and convince a judge and jury that your business was at fault.
One of the best ways to reduce your organization’s liability risks is to act in a lawful manner and be able to demonstrate your responsibility for the welfare of others, including:
- Your clients
- Your customers
- Your competitors
- The general public
If you don’t cover your bases, you are setting up your business for failure. But, if you can provide evidence that you took your responsibility seriously and made reasonable efforts to prevent harm to others, you are much less likely to be found liable. You could still be sued, but you have a better chance of winning your case.
Some examples of liability risks that you could be faced with are:
- Bodily injuries to customers, vendors or other third parties on your commercial premises.
- Damage one of your employees or one of your products or services caused to a third party’s property.
- Advertising injuries (e.g., slander, libel, misappropriation, and copyright infringement).
How you can protect yourself:
- Have training and safety protocols for all of your driving employees.
- Have safety protocols for all areas of your business that third parties may enter. For example, you should:
- Require your staff to immediately clean up any spills to avoid a slip and fall case.
- Make sure that entrances and exits are not blocked in case of an emergency.
- Have quality control procedures in place to reduce the chances of making a product that may malfunction and injure a third party or damage their property.
- Have procedures in place to ensure that your advertising does not infringe on another company’s copyright or misappropriate a third party’s intellectual property.
- Maintain copies of communications with your clients or employees about risk and safety.
- Maintain records of your efforts to verify that someone you hired was not a risk to others.
- Maintain records that you provided warning signs or other warning signals regarding a hazardous condition on your property.
- Maintain records that your equipment is regularly serviced by knowledgeable technicians.
The backstop: A commercial general liability policy
Commercial general liability insurance is one of the most important insurance products, due to the negative impact that a lawsuit can have on a business and because such liability suits happen so frequently. It pays for your legal expenses (lawyers’ fees, court costs) and any settlements or judgments, up to the limits of your policy.
The standard CGL policy includes:
- Bodily injury and property damage liability.
- Personal and advertising injury.
- Medical payments for injuries sustained by a non-employee caused by an accident that takes place on the insured’s premises or when exposed to the insured’s business operations.