Small business owners don’t just have to focus on keeping costs down and increasing sales, there are also a lot of other things that go into making a business successful, including managing risk. Many a well-run business have been blindsided by misfortunes like burglary, arson, freak accidents, and more.
Identifying likely risks and taking steps to avoid or mitigate them will help businesses avoid headaches and costs that can cripple their endeavor. Having a solid general liability insurance policy is one way to help mitigate and prepare for risks.
Bad luck can happen to anyone, and even the most careful business owner can encounter a misfortune that leads to financial loss. It could be a burglary that results in the theft of valuable merchandise. It could also be a customer slipping in the store. Industry experts predict that about 40 percent of small businesses will experience a property loss or a situation where they’re liable for harm to another person or business in the next 10 years.
Top Causes of Property and Liability Claims
Small businesses like restaurants and bars can benefit from comprehensive bar insurance and restaurant insurance policies. Insurance packages provide protection from a wide array of risks. Here are a few top causes of property and liability claims:
Burglary and Theft
Burglary and theft are large causes of property and liability claims for small businesses. Simple security measures will help reduce your chances of burglary and theft. Locks for doors and sensitive areas, a buddy system for making deposits, electronic security equipment, and good security practices can prevent your business from being victimized by criminals.
Internal threats are also a cause of big losses among insurers. According to CNBC, employee theft costs US businesses $50 billion per year. Small and mid-size businesses bear the brunt of employee dishonesty. Instilling good morale and accountability can help small business owners mitigate this threat.
Water and Freezing Damage
These claims typically involve damage to a physical location caused by water leaks and frozen water. Examples include roof damage from snow or water damage caused by frozen pipes bursting. Good property maintenance can go a long way toward reducing your chances of falling victim to these hazards. Keep your roof clean and clear of debris that may accumulate water. Inspect your plumbing regularly and make repairs if needed. Also, take care to cover your pipes in freezing conditions.
How to mitigate it – Good property maintenance can go a long way to reducing your chance of falling victim to these hazards. Keep your roof clean and clear of debris that may accumulate water. Inspect your plumbing regularly and make repairs if needed. Also, take care to cover your pipes in freezing conditions.
Slip and Fall Injuries
If a customer slips and falls at your business, a court could hold you liable for his or her injuries and award damages to the customer. Businesses with a lot of foot traffic are vulnerable to these types of accidents. Making sure your property is free of slip-and-fall hazards, such as loose steps and hand railings, slick floors, and clutter, can help reduce your chances of having an accident occur on your property. Putting up signs to warn customers of hazardous conditions, such as a wet floor from a spill or mopping, can also reduce the chance of a fall and may lower your liability.
Other Injurious Accidents
Slip-and-fall accidents aren’t the only source of customer injury you have to be worried about. A visitor to your store or restaurant might be injured if products fall from a top shelf and strike him or her. Regularly inspect your bar, restaurant, or store for safety hazards, such as unstable displays, heavy objects on top shelves, etc. Keeping your place of business tidy and clean will give customers a good impression and help keep them safe.
Reputational Harm
Business owners may be sued if third parties claim that the business owner or employees caused damage to their reputation. Advertising that maliciously disparages a competitor or social media posts ridiculing a third party can give rise to these claims. Business owners and their employees need to be careful with their advertising materials and their social media posts. Avoid untrue statements, and do not use other people’s social media photos and videos without permission.
Vehicle Accidents
Businesses that use automobiles or other vehicles, such as forklifts or ATVs, to transport products or people need to be aware of the risk these operations pose. Should an employee operating a company vehicle or a personal vehicle used on your business’s behalf cause injury or property damage to another party, your business can be held liable. Businesses that use these vehicles should only allow qualified persons to use them. Driving and certification requirements can help, as can regular vehicle safety training. Employees who misuse vehicles must be held accountable to help manage risk.
Product Liability
If your business manufactures consumer products and those products harm consumers or others, your company could face a product liability suit. Some examples of product liability suits include food products that make people ill, cosmetics that burn the skin, electronic devices that catch fire, etc. Proper testing and good manufacturing practices can help prevent poor-quality products from going on the market. If a problem is discovered, do not hesitate to issue a recall, as the cost of lawsuits can easily outweigh the cost of a recall.
Liquor Liability
Certain types of general liability insurance provide coverage for liquor-related accidents. If you own a bar, restaurant, or nightclub and someone becomes intoxicated on your premises and then goes and causes harm to another person or property, you need liquor liability coverage. Comprehensive liquor liability insurance will help protect you from expensive lawsuits or temporary closures.
The Costliest Claims Aren’t the Most Common
Some of the most common property claims aren’t the most costly. While burglary and theft account for about 20 percent of property and liability claims, making them the largest individual source of claims, they cost just an average of $8,000 per claim. Reputational harm claims are less common, making up less than 5 percent of general liability claims, but have an average cost of about $50,000 per claim. While you can’t anticipate every eventuality, you can determine the threats most likely to impact your business and take steps to reduce your exposure to liability claims from these risks.
General Commercial Liability Insurance
Small business owners face many risks in pursuing their dreams, but a good insurance agency can help. Business owners with a strong commercial general liability (CGL) insurance policy can sleep easier at night, knowing that their life’s work is protected in the event of an unfortunate accident. General liability policies are insurance packages that provide coverage of claims for bodily injury and property damage arising from the operations of a business. If a third party is injured or suffers damages resulting from your business’s operations, this policy will cover the cost of defending any lawsuit that may be filed and paying potential damages, up to the policy’s limit.
A good CGL policy can protect you from lots of risks, but it won’t cover every type of claim. A CGL policy won’t cover fire or storm damage to your store or office, employee injuries, or claims arising from employment disputes. You’ll need to find which other liability insurance covers those risks, such as commercial property or workers’ compensation insurance. When seeking commercial general liability insurance policies and other business insurance policies, it is beneficial for owners to work with an insurance agency with extensive experience working with business clients.
Get Restaurant and Bar Insurance Today
Tabak Insurance, a Texas insurance agency, specializes in helping small business owners obtain the right liability insurance coverage they need to protect their hard work. Comprehensive bar insurance and restaurant insurance provide the necessary protection for business owners and their property. We offer comprehensive packages like general liability insurance, liquor liability insurance, commercial property insurance, and so much more. In the past two years, Tabak has saved clients an average of 20 percent in insurance premiums. Start benefiting from having an insurance agency passionate about helping entrepreneurs protect their life’s work by contacting our team today.
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