LIABILITY RISK MANAGEMENT should be a priority for all businesses, especially small and medium enterprises with limited resources and finances. Why? Well, for the exact reason that new and growing businesses may not have the resources and finances needed to survive a lengthy legal liability battle.
The difference between insurance and liability risk management
Picture this scene: Your office is broken in to. Your computers and office equipment are stolen and the premises vandalised. Although your insurer can’t replace the information stored on the computers they can replace the actual machines with brand new ones to the same value, and assist with repairing your premises.
But with liability risk, it’s not that simple. Liability insurance covers you, the business owner, for property damage, injury or death that you may be liable for due to a number of reasons. And, there’s no telling how much the claim will amount to. For example, if a tile is loose on the steps leading to your office and a client or employee injures themselves badly from slipping, the cost of medical attention, pain and suffering, rehabilitation, loss of earnings etc will be immense. A liability insurance policy is the solution.
Would your company be able to survive a liability claim?
One needs to ask yourself if your business would be able to survive a liability claim and what the impact of such a claim may be. In addition to insurance, there are several risk management steps that new and growing businesses should take in order to reduce their liability risk.
Around the office
- Prevent slips, trips and falls at your home office by ensuring that the office and reception area is free of debris and clutter
- Make sure that your bookshelves are constructed of a sturdy material and that they are secured to the wall so that leaning on them will not cause them to topple over
- Sweep, mop or vacuum your office floors daily
- Repair or replace worn, torn or loose floor coverings straightaway
- Inspect your office furniture regularly and repair or replace as necessary
- If you are a professional, you’re at risk of allegations of failure to advise customers appropriately and thereby breaching your duty of care as a professional. Be sure to always sign a contract with your customer because it helps resolve disputes that may arise in the future. Always be thorough in the advice that you give to your customers. Remember that informed customers are less likely to be dissatisfied customers
- If you are a director or officer of a business, make sure that you produce and maintain accurate accounting records and in particular, all tax and Vat returns
- Another tip is to avoid conflict of interest situations
Article written by Ken Van Sweeden
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