More than 80 million lawsuits are filed in U.S. courts annually. This number alone should be enough to have business owners questioning exactly what their liabilities are and take action to see that they are covered in each circumstance. Do you know what your liability exposure is? 

What is Liability? 

According to Entrepreneur, liability is, “Anything for which a company is legally bound or obligated, as to make good any loss or damage that occurs in a transaction.” Liability then is any area of risk where your company could be vulnerable to litigation. This risk grows as your company evolves. For example, as your workforce increases, so too does your risk of being exposed to a liability claim for discrimination, an injury at work, or wrongful termination. 

Controlling your Liability Risks

No one wants to think about lawsuits or liability risks when they are doing their day-to-day work. Unfortunately, it is one of the many “hats” that business leadership are forced to wear as their company grows and evolves. 

Commercial insurance and the levels of liability insurance can be very complicated, so here is a short list of areas where you and your business could be exposed to liability. We suggest discussing your concerns with your local agent to be sure you are covered in each area and where you can make changes so that you can lower your risks.

  • Environmental Safety – If you own a storefront or office, you are at risk of having an employee, vendor, or client have an accident on said property. Slips and falls are probably the most common occurrence that puts a company at risk. To counteract this, businesses should keep track of all actions taken to maintain the property such as shoveling in the winter, professional cleaning, and inspections that ensure the health and safety of your location. 
  • Employment Liability – As we mentioned earlier, the more employees and employee turnover your company experiences, the higher your risk. Keep accurate records on employees so that in the case of a complaint of wrongful termination or discrimination, you will have saved communications, warnings, and evidence of actions you took during their employment. 
  • Errors and Omissions Liability – If your business makes a mistake that impacts a client, you could be sued as a consequence. For example, if one of your employees accidentally deletes a client’s data, that could be cause for a claim. 
  • Product Liability – Another area of risk deals with products or services sold by your business. If a product causes harm or injury due to poor workmanship or labelling, your business could be at risk. 
  • Vehicle Liability – If your work requires driving a company vehicle, here is another area where you are exposed to liability. In the case of an accident, your company could be held responsible for the damages and/or injuries caused by the commercial vehicle. 

Are you aware of all the areas of risk your company faces? While we don’t want to overwhelm business leaders, we think it is best to be prepared with the right amount and type of insurance coverage.