Accidents HappenRecognize and control your liability exposures

By David Wilhite

Early in 1993, Juan Herrera, a truck driver, slipped and fell into an uncovered drainage hole while making a delivery, badly injuring his back. Herrera filed a liability lawsuit and, based on the fact that the drainage hole constituted a known hazardous condition, the jury found the defendant guilty and awarded Herrera $1.95 million in damages.

As every business owner knows, recognizing and controlling liability exposures is a prime concern in today's litigious society. Business liability insurance is designed to protect you against claims that someone was hurt, or property was damaged, due to negligence on your premises. However, merely having coverage in place is not enough--today's courts are getting tough on business owners who allow hazardous conditions to exist, and judging by the large awards juries routinely hand out, you may wish to consider higher limits of liability. (Increased liability limits are readily available for self-storage facilities in $1 million, $2 million and $3 million limits). To help you avoid the legal headaches and financial hassles of a liability lawsuit, this article is designed to help you recognize and control your liability exposures, and hopefully save you some money in the process.

Get in Control

The single most important key to protecting your self-storage facility against liability lawsuits is awareness--awareness of your responsibilities under the law, awareness of potential hazards at your facility and awareness of your need to do everything a prudent person would do to prevent accidents. Court decisions can and do favor those who take a pro-active stance; and, in the case of a lawsuit, an ounce of prevention is definitely worth a pound of cure.

Reduce Potential Liabilities

The best way to limit your liability in advance is by identifying and eliminating (or at least minimizing) potential risks. Take a walk around your facility and play a game of "What if...." Try to imagine what could possibly go wrong and what you can do to safeguard against those situations occurring. For example, you may discover a glaring hazard, such as a large pothole outside of one of your storage units, that needs to be blocked off and covered. Or you may chance upon a less obvious risk, such as a worn or curled floor mat, which was intended to prevent slips and falls but may actually cause them.

On the subject of reducing hazards, keep in mind that a potentially dangerous situation can be created in an instant by a careless employee in the normal course of work, for example, by leaving a wet floor unattended for a few moments while mopping. Courts can and will hold management responsible for the actions of their employees in these situations. Since slips and falls account for the vast majority of liability claims, it pays to be extra careful about preventing them.

There are several other important procedures for reducing liabilities that can help prevent lawsuits, including conducting accident training sessions with your employees, conducting regular quality-control measures of your facilities and equipment, and keeping documented records of preventive maintenance. Be sure to hire competent employees and regularly monitor their performance. If you are not at the facility on a daily basis, make it a habit to drop by periodically without notice in order to spot unforeseen risks.

No matter how carefully laid your plans may be, accidents can and do occur. If someone on your premises should suffer an injury, take immediate action by first calling an ambulance for the injured person, then documenting all known facts surrounding the accident in order to accurately reconstruct the events in case of a lawsuit. For safety's sake, be sure to get all of the following information in writing:

• Name, address and phone number of injured party.
• Date and time of the accident.
• Name of employee(s) on duty and name(s) of any witnesses.
• Details about what caused the accident (i.e., was it caused by the customer or by a pre-existing hazardous condition?).
• Information about when the site was last cleaned and inspected for hazards.

It's also a good idea to take a picture or camcorder footage of the site where the accident occurred, and to try to get a written statement from the injured party if possible. Oh, and one last caveat--if a trip to the hospital is necessary, call an ambulance--don't use a personal or company vehicle. You may expose yourself to a whole newset of liabilities that are much better avoided.

What to Do in the Event of a Claim

In the event of an accident, notify your insurance company as soon as possible. Give your agent all of the information outlined above. If you are served with a lawsuit, the number and nature of available defenses depends upon the specifics of the individual suit. In an injury-related action, the underlying claims must be analyzed to determine available defense, while in negligence cases, the owner may be able to assert the claimant's degree of fault, which could reduce or even eliminate his right to recover damages. Assuming the circumstance is covered, your insurance company will come to your defense.

When the time comes to seek a business liability quote, select a specialty insurance agent who is knowledgeable about your business. Keep in mind that, in today's litigious society, aggregate liability limits of $1 million or more should be considered as a minimum. Ask your agent what kinds of claims have been filed against storage facilities in the past and what the results were. You may also want to consult with a legal professional to find out what kinds of awards (in dollar amounts) have been made in your state, and under what circumstances, in the past few years. Finally, for maximum protection, look for a business liability policy that is written on an occurrence basis with no aggregate limit.

David Wilhite is the marketing manager of Universal Insurance Facilities Inc. Universal offers a complete package of coverages specifically designed to meet the needs of the self-storage industry, including loss of income, employee dishonesty, comprehensive business liability, hazardous-contents removal and customer storage. For more information, contact Universal at Box 40079, Phoenix, AZ 85067-0079; phone (800) 844-2101; fax (602) 970-6240; www.vpico.com/universal.