Customer Injury & Property Damage

Costliness: #5


Frequency: #6

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Customer Injury & Property Damage in Small Businesses

A shelving unit tips over in your store and falls on top of a customer. A guest is burned when an employee spills hot coffee on her. A client’s house is damaged when you lose control of a backhoe and swing the bucket through one of their walls.

These are the kinds of accidents that can result in customer injury and property damage. If you’re at fault, the cost of medical bills, repairs, and more can be tremendous.

Which Industries Are Most at Risk for Customer Injuries?





Places open to the public

Any business working on customer property

How Small Business Insurance Can Help when Customers are Hurt

Third-party customer injuries and property damage are covered by one small business insurance policy:

  • General Liability Insurance: General Liability can cover the medical expenses for a customer who is injured on your premises or at your worksite. It can also provide means for a legal defense if that customer decides to sue. Additionally, this coverage may pay to repair or replace customer property that you accidentally damage.
  • Inspect your premises regularly and look for potential hazards.

  • Make it a routine to inspect, clean, and maintain your tools and equipment.

  • Document these inspections and keep a record of repairs.

  • Post warning signs immediately if there is a problem or hazard.

  • Make customers sign waivers and alert them of possible dangers if there are inherent risks in your business.

More Details on Customer Injury & Property Damage

According to James Goodnow (@JamesGoodnow), injury lawyer with Lamber Goodnow Injury Law Team, (@LamberGoodnow) small business insurance claims arising from premises liability incidents can be costly, and given that cost, umbrella policies or multiple layers of excess policies are almost a business necessity today. “Having the right amount of Commercial General Liability Insurance is critical, especially when operating a business that involves high-traffic consumer situations,” he says.

If your business involves inherent risks, inform customers beforehand with waivers or posted warnings.

Goodnow also notes that certain businesses need to be extra cautious. “If your business is a place with animals or banana peels or a gym with lots of equipment, you need to be even more vigilant in terms of inspecting regularly – and fixing any problems quickly,” he says.

If your business involves inherent risks – e.g., certain sporting or athletic activities – you may ask people to sign waivers or post signs warning of innate risks. However, be aware that “state laws vary as to the requirements for these waivers and their enforceability,” Goodnow says. It’s also important to note that inherently risky ventures will likely face higher small business insurance premiums.

If your business holds on to customers’ property – you repair watches or provide daycare for pets, for example – you may benefit from Bailee Insurance (or Inland Marine Insurance) coverage in case anything happens to the property while in your care.