February 1, 1998

5 Min Read
Accidents HappenRecognize and control your liability exposures

Accidents Happen

Recognize and control your liability exposures

By David Wilhite

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

As every business owner knows, recognizing and controlling liability exposures is aprime concern in today's litigious society. Business liability insurance is designed toprotect you against claims that someone was hurt, or property was damaged, due tonegligence on your premises. However, merely having coverage in place is notenough--today's courts are getting tough on business owners who allow hazardous conditionsto exist, and judging by the large awards juries routinely hand out, you may wish toconsider higher limits of liability. (Increased liability limits are readily available forself-storage facilities in $1 million, $2 million and $3 million limits). To help youavoid the legal headaches and financial hassles of a liability lawsuit, this article isdesigned to help you recognize and control your liability exposures, and hopefully saveyou some money in the process.

Get in Control

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

Reduce Potential Liabilities

The best way to limit your liability in advance is by identifying and eliminating (orat 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 tosafeguard against those situations occurring. For example, you may discover a glaringhazard, such as a large pothole outside of one of your storage units, that needs to beblocked off and covered. Or you may chance upon a less obvious risk, such as a worn orcurled floor mat, which was intended to prevent slips and falls but may actually causethem.

On the subject of reducing hazards, keep in mind that a potentially dangerous situationcan be created in an instant by a careless employee in the normal course of work, forexample, by leaving a wet floor unattended for a few moments while mopping. Courts can andwill 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 beextra careful about preventing them.

There are several other important procedures for reducing liabilities that can helpprevent lawsuits, including conducting accident training sessions with your employees,conducting regular quality-control measures of your facilities and equipment, and keepingdocumented records of preventive maintenance. Be sure to hire competent employees andregularly monitor their performance. If you are not at the facility on a daily basis, makeit 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 someoneon your premises should suffer an injury, take immediate action by first calling anambulance for the injured person, then documenting all known facts surrounding theaccident in order to accurately reconstruct the events in case of a lawsuit. For safety'ssake, 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 theaccident occurred, and to try to get a written statement from the injured party ifpossible. Oh, and one last caveat--if a trip to the hospital is necessary, call anambulance--don't use a personal or company vehicle. You may expose yourself to a wholenewset 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. Giveyour agent all of the information outlined above. If you are served with a lawsuit, thenumber 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 availabledefense, while in negligence cases, the owner may be able to assert the claimant's degreeof fault, which could reduce or even eliminate his right to recover damages. Assuming thecircumstance is covered, your insurance company will come to your defense.

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

David Wilhite is the marketing manager of Universal Insurance Facilities Inc.Universal offers a complete package of coverages specifically designed to meet the needsof the self-storage industry, including loss of income, employee dishonesty, comprehensivebusiness 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.

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