As a retail store owner, you probably have a good number of people going in and out of your store on a daily basis. Heck, you might even have some regulars with zany personalities that pop into your establishment, like Norm from Cheers, or Barney from The Simpsons (feel like there’s a theme going on here…)
With every colorful character that drops by your store, there’s an opportunity for things to go awry…and these things could be costly. Whether a pricey product in your store mysteriously disappears or a customer trips and falls over one of your displays, certain events can have a large financial impact on your business, especially if they’re not covered by your insurance policy.
But don’t worry, we know how you can protect your business from common claims that retailers like yourself experience. We’ve broken down three examples of common claims scenarios, including tips on how to avoid them, and what insurance coverages can help you protect your business in each scenario.
These retail claims could put a dent in your business
Common Claim #1: Sammy the Shoplifter
Sammy is a relatively new customer to your store. He pops by the store about once a week, takes some time to browse around, and usually buys a couple of items. Lately, however, you’ve noticed that Sammy’s been taking much longer to browse around the far corners of your store. Furthermore, you noticed that he hasn’t purchased anything in his last handful of visits.
One day, you realize that Sammy hasn’t returned to the store in ages. You also notice that a number of your most expensive items have gone missing. Putting two and two together, you do a Google search and discover that Sammy is in fact Sneaky Sammy, a notorious shoplifter who steals from small retailers before he skips town. He’s never been caught by police, and it seems that he’s gone back into hiding.
Theft can cause your business an arm and a leg, but there are a number of measures you can take to ensure that someone like Sneaky Sammy doesn’t pose a threat to your business. Here are some tips we recommend:
- Make your presence known to ward off suspicious shoppers; a friendly greeting to your customers can guilt-trip sneaky shoplifters.
- Review your store’s layout to make sure there’s enough lighting throughout; you can’t catch shoplifters if you can’t see them!
- Set up security cameras to help you see every nook and cranny in your store; you can’t be everywhere all at once!
- Install a welcome bell at your door to help you keep track of who’s entering your store; it’s also just a fun sound, in general!
- Use electronic tags on all your merchandise to detect non-purchased items that exit your store; nothing stops a quiet getaway quite like an obnoxious alarm.
- Keep expensive items near the checkout counter; shoplifters who are feeling bold will think twice before swiping goods right underneath your nose.
- Pay careful attention to people who look suspicious, people carrying large bags, and people with strollers or baby carriages.
- Have proper staffing on the sales floor to reduce the chance of theft. Ensuring your sales area is serviced by an adequate number of employees will help give you peace of mind.
Even after following all of these tips, a shoplifter like Sneaky Sammy could still slip through the cracks. Commercial property insurance can protect you from theft, as well as other losses that can occur to your building and its contents. This coverage includes replacement costs for stolen contents, repair costs after a burglar breaks into your store, and business interruption coverage if you need time to get your business up and running again.
Common Claim #2: Slippin’ Susan
Susan is a regular customer at your store. She’s friendly and always has a smile on her face. One thing about her, though, is that she’s often wearing an arm cast or a leg brace. You’ve asked her about this, and she’s said she’s suffered bad slips and falls at other stores. She’s not clumsy or anything; she’s just a frequent victim of obstructive store displays and poorly mopped floors.
Slips, trips, and falls like the ones that Susan experiences can lead to lawsuits, which are common amongst small business owners. In fact, 30% of small business owners dealt with a lawsuit between 2012 and 2015. These lawsuits can be quite costly. There are ways you can proactively protect your business, so that bae doesn’t catch your customers slippin’. Here’s a breakdown of what to watch out for:
- Clean up spills on walking surfaces. If you accidentally spill your morning cup of Joe, don’t pull a Shaggy and say it wasn’t you! Own up to your party foul and clean it up.
- Put up warning signs. After you’ve mopped or waxed your floor, make sure to put up a caution sign so your customers know to tread carefully
- Shovel your property. Slips can happen in your storefront, your parking lot, or even on the walkways outside. Keep a winter maintenance log to track when you’ve shoveled.
- Watch out for sloped walking surfaces. A steady incline can lead to not so steady falls, so make sure there’s grip on your slopes.
- Flatten any loose or unsecured mats. Think about all the times you stumbled over a loose mat. Now imagine that happening in your store. Not a fun thought, is it?
- Secure any exposed cords. It’s cool if you have funky electronics in your store to catch your customers’ attention; it’s not cool if you leave all the cords dangling around.
- Clean your clutter. Not everyone can maneuver around your labyrinth of mess as well as you can. Be considerate and keep your store clean.
- Keep your store well-lit. Ever try walking to the bathroom at night while it’s pitch black? Not fun, is it? Don’t put your customers through the same misery.
- Avoid uneven walkways. Cracks in your flooring and walkways can lead to a big crack in your business operations, so make repairs as needed.
Accidents happen, and they could lead to someone like Slippin’ Susan taking a tumble in your store. These accidents could damage your business. Fortunately, commercial general liability insurance can help you protect your business in the event of a lawsuit resulting from slips, trips, and falls. Having best practices in place along with CGL insurance can help you prevent your customers and your business from getting bruised.
Common Claim #3: Unlucky Larry
Larry is a pretty superstitious guy. He checks the mail every Friday and buys a lotto ticket every Monday. He wears his lucky socks when watching his favorite hockey team play, and so far they’ve had an undefeated season. His luck runs out, however, when he visits your store. He tries one of your famous cupcakes, but he calls back a couple weeks later and says that he got terrible food poisoning from it. He missed an important work week and a family vacation, and he’s looking to get some monetary compensation.
When a customer like Larry purchases one of your products, an issue with that product may cause them bodily injury or property damage. For instance, a faulty power tool or a bad batch of cupcakes could cause bodily injury, while a defective electronic device could cause property damage. When situations like these occur, you may be found responsible for the damages if the source of the issue can be traced back to your business. And then you may find yourself in the middle of a long and costly lawsuit…who’s the unlucky one now?
Many different things can lead to product issues for your business. Here are the main ones to look out for:
- Identify design flaws before the products are even made. Whether you’re making your products in-house or outsourcing to a third party, be sure to diligently review your designs before you begin making your product. This can help you establish quality control and ensure that your product actually works as intended, unlike these three-wheeled cars that were prone to flipping over (seriously, who thought these where a good idea!?)
- Look out for manufacturing defects when your products are being made. Sometimes an issue will arise from a faulty part or a missing piece. Addressing this early on – before your products hit the shelves – can help you avoid faulty product fiascos, like exploding phones.
- Avoid marketing blunders that advertise your product incorrectly. This includes incorrect labeling, safety warnings, and insufficient instructions. These mistakes may cause your customers to hurt themselves; other times, they’ll just make you look silly.
Along with these tips, product liability insurance can help you protect your business if a customer was to become an Unlucky Larry. The right product liability policy will help protect your business if you’re found legally responsible for a product causing bodily injury or property damage to a third party. This coverage can even help with legal expenses in the event of a lawsuit, and payments made as a result of unintentional negligence. Wouldn’t you rather cover your ass than cover the cost of a lawsuit on your own?
Safeguard your business
Theft, slips and falls, and faulty products are all common problems that can arise from the colorful characters that pop by your store. Being aware of these scenarios and knowing how to prevent these risks can help you avoid singing a eulogy for your business.
This blog is provided for information only and is not a substitute for professional advice. We make no representations or warranties regarding the accuracy or completeness of the information and will not be responsible for any loss arising out of reliance on the information. Terms, conditions and exclusions apply to coverage. See policy for details.