Small businesses are responsible for a variety of people, products, and locations related to their companies, making it imperative that they do as much as possible to avoid harm. Many things happen throughout the workday that can leave your company liable, including customers coming in and out, employees changing shifts, and products coming and going. If you know where to protect yourself in many different aspects of your business, you can limit its liability.
Here we’ll take a look at the various ways that your business can be exposed to risk.
What Does Liability Mean for My Business?
Legally, a company is liable or responsible to their customers and employees as well as liable for harm that happens on their premises, or as a result of their products or employment practices. For businesses, limiting potential liabilities comes down to diligence, which is human based, and actual protection methods, like insurance policies. There are many potential risks that a company could be held responsible for in the instance that they face a lawsuit, so one shouldn’t worry endlessly that something could happen, but just be diligent about preventing it as much as possible. Having insurance that covers potential liabilities if they happen is a more concrete and necessary way to protect your business in the event that you face a lawsuit.
So how many businesses face liabilities? Below we take a look at some common statistics.
There are various ways that businesses can be vulnerable to liability claims, including aspects on the outside and inside of the business. Here we will break them down, along with ways that you can protect your business from all sides.
The Outside of Your Business
The exterior of a business is subject to liability from a variety of sources. This includes the parking lot, outer premises, and the physical security of the building itself.
Parking Lot Liability
According to Kansas State University, Kansas experiences an average snowfall of 19 inches a year. The parking lot and walkways outside of your business are particularly vulnerable during the dangerous winter weather. The best way to limit your liability in the parking lot is to pay attention to road hazards, including snow that needs to be plowed, ice on the road, and potholes. If something causes an accident or someone alerts you to the presence of a potential hazard, address the problem immediately.
If someone gets injured or an accident occurs on your business’s premises due to unsafe conditions, you can be held responsible. Premises liability encompasses anything that occurs on your property, but the outdoor areas are often overlooked. Business owners have a duty of care to maintain safe premises for their customers. This includes grounds maintenance, as flooding, hazards, snow and ice, and other conditions can cause parking lots and walkways to become unsafe. Keeping an active schedule for maintenance services outside of your business–both in general and due to weather related events–is a good way to prevent lawsuits from affecting your business. Anytime a customer, employee, or business associate tells you about something that could turn into a problem, don’t ignore it.
If you’re leasing a space for your business, it’s important to make sure that you have the right liability coverage in the event that something happens. Businesses, whether they own their space or are renting it, are still subject to the same risks as everyone else. In this case, it’s important to make sure that you read your lease agreement contract before signing it, as this will tell you if the landlord covers liability insurance, how much, and what type. In some cases, you may need to get supplemental insurance on your own if the lease doesn’t cover enough of what you need.
Security Protection Liability
It’s your responsibility to keep your goods and your store safe from theft and harm. An alarm system and security cameras are great assets for protection. A security alarm system can protect your business even when you’re not at the store and an external security company is often alerted. Cameras help you or the police identify someone who is stealing or damaging property. But remember: both technology and humans can slip up. Regularly test your security equipment to ensure proper working order and make sure the security professionals that you’re working with are aware of your business’s security protocols.
The Inside of Your Business
The inside of your business has a variety of different things that need to be protected, including people, products, and conditions. Here are the various ways that the inside of your business can be protected.
The loss of products at the hands of a customer, employee, or distributor is money from your pocket down the drain. This is the last thing you want, as loss prevention can be relatively easy to avoid with the right systems in place. Theft can happen at the hands of employees, customers, or shoplifters. Keeping a tight control on inventory and training your employees in loss prevention methods can help your business safely and securely prevent a theft or know how to react if one does happen.
Unsafe products can be a hazard not only for your business, but for your customers and reputation. When a product you sell is unsafe, you can be held accountable for failing to prevent the sale of it to the wrong people, such as minors and cigarettes, or not having products behind locked cases, such as with firearms. The product could also be expired and if it was never removed from the shelves, that could pose a potential risk. The best way to prevent risk from unsafe products is to make sure that your employees are up to date on product safety and that they’re following proper protocol. Holding this standard within your business itself can make sure that a customer never purchases an unsafe product from your store.
Sanitation and Cleanliness
Sanitation and cleanliness play a role in unsafe products, as problems such as this include checking expiration dates, if it relates to food, and inspecting your products for signs of harm or damage. Liability can also pertain to things beyond food, as the internal premises of your business can possibly present a liability due to sanitation errors, such as proper maintenance and hygiene protocols in the restrooms. The proper way to prevent this is to make sure your employees are trained on proper sanitation techniques and that they are regularly being performed properly to mitigate risk.
When it comes to food handlers licenses and permits, it’s important to know the rules and laws. In Kansas, there is no statewide requirement for having a food handler’s card and it is up to the business to decide to enforce their own rules or not. If you choose to have food handler’s cards for your employees, it is best to keep a copy of their card on file and remind them when it is time to renew. Incorporating the relevant information from the food handler’s card information into your training with the employee can help ensure that they regularly follow the mandated standards. Also being on the lookout for signs of potential mishaps regarding sanitation and cleanliness in your business and in the actions of your employees can help prevent further risk.
Workers’ compensation is a good thing to have even if it’s not required by your state, as in the case of employee injury or death, no matter the size of the business, accidents can happen. Some businesses are more liable to this due to the nature of the job or business, but even small liabilities, like a slip and fall from water on the floor, can have damaging consequences. The best way to mitigate risk of an employee’s injury or death is to have strict safety standards and procedures, as well as proper job and safety training. Another crucial thing to have in order to protect your employees and business is workers’ compensation insurance. This allows you to make sure that your company doesn’t go bankrupt if you need to cover workers’ compensation costs in the event that someone gets injured or dies.
If you find yourself in a legal liability situation as a Kansas small business owner, Brad Pistotnik Law can help. With experience in practicing law since 1981, Brad Pistotnik has helped many small business owners with a variety of liability areas, including workers’ compensation, negligent training, hiring, or supervision, and more. For more information, contact Brad Pistotnik today.
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