Do you ever wonder what it feels like to deal with lawsuits in real life? Sure, it might not have the fictional drama and tension of hit TV shows like Law & Order or Suits, but facing lawsuits is a very real thing, especially for retail business owners. That’s because retailers are exposed to a wide variety of liability risks that could lead to costly lawsuits. But what the heck is “liability” anyway?
Liability refers to your company being responsible for damages to a third party in the eyes of the law. The day you start your business is the day your business is exposed to liability. Why? Well, at any time, your business could be the target of a lawsuit from a customer, someone browsing in your shop or even just a passer-by. Anyone who comes into contact with your business could potentially file a claim against you.
The most common claims that your business may face from a third party include bodily injury and property damage. Keep in mind that your business doesn’t have to deliberately do anything wrong to be sued – in fact, a lawsuit could stem from an incident that you or your employees weren’t even aware of. Customers are your source of revenue and ultimately responsible for your organization’s success, but they’re also one of your biggest risks.
There are different types of liability that your retail business may be exposed to, which could result in costly lawsuits. These include bodily injury liability, product liability, and cyber liability. Luckily, there are actions you can take to prevent and address slips and falls, product mishaps, and cyber attacks. Check out some of our tips below.
Preventing bodily injury
According to Statistics Canada, the main cause of hospitalized injuries in Canada is falls. 50% of adolescent injuries are caused by a fall and the number increases to 63% for seniors. It’s important to establish and implement inspection and monitoring procedures to identify and manage slip and fall hazards on your property. Here are a few tips to help minimize the chance of these types of accidents on your property:
- Having the parking lot inspected at regular intervals for uneven surfaces, potholes and other debris.
- Keeping your walkways clear and inspecting them regularly for tripping and slipping hazards.
- Ensuring your stairways are regularly inspected to keep walking surfaces and handrails in good condition.
- Ensuring there is appropriate lighting installed and maintained on your property.
- Keeping a log of all the maintenance performed on your property, including who performed it.
Addressing product mishaps
If you unknowingly and unintentionally introduce a hazard into your products, your customers can still file a lawsuit against your business if they suffered bodily injury as a result of your goods.
Sometimes this may lead to a recall on the products you’ve already sold. Should this be the case, it’s important to have a plan in place to help mitigate any further risks as efficiently as possible. Often, commercial general liability insurance policies do not include coverage for product recall. Here are a few tips that can help:
- Assign and assemble qualified personnel with sufficient authority to coordinate the recall.
- Notify and report the defective product to applicable authorities such as a Health Canada Product Safety Officer or a Canadian Food Inspection Agency representative.
- Identify all products needing to be recalled.
- Identify, quarantine and clearly mark all remaining stock of recalled products on the property.
- Track the products that have been distributed.
- Determine the action that your clients or consumers must take.
- Prepare and distribute a recall notice to all clients and consumers who may be affected.
- Dispose of remaining recalled products.
Blocking cyber attacks
Cyber theft, data breaches and other incidents where private information is at risk are a top concern for small business retailers. 70% of Canadian businesses claim they have experienced some type of cyber attack with the average financial loss totaling over $14,000.
Here are 3 tips that can help you manage the threat of cyber attacks at your retail business.
- Educate your employees: Make sure your employees are aware of how to recognize cyber threats by providing examples. Instruct staff to be cautious and avoid using personal information when creating passwords.
- Develop policies and procedures: Have policies in place to manage user privileges and restrict network access to only employees and necessary third parties. Ensure there are protocols in place for when electronic devices are stolen or lost, and implement regular audits to make sure cyber security measures are being followed.
- Be prepared: Make sure all private and sensitive information is encrypted when transferring files online. Back up all your files to an external hard drive or cloud sharing service in case of a hardware breakdown. Have a contingency plan if your systems go down and monitor your systems closely to detect and react to hacks quickly.
Want to learn more?
Not everyone can hire high-profile lawyers like Harvey Spector or Ally McBeal, which is why it’s so important for you to know how to protect your retail business from risks that could lead to lawsuits. There are even more risks and solutions that retailers need to be aware in order to protect their business. That’s why we’ve developed a comprehensive white paper to educate you on retail liability risks and preventative measures you can take.
Want to protect your business? We can help!
Looking for more ways to protect your business? Having solid business insurance coverage can give you peace of mind and help you recover after a sudden loss or a costly lawsuit. That’s where TruShield Insurance comes in.
TruShield can provide your business with tailored coverages that meet your individual needs. We offer customizable coverages, including property insurance, general liability insurance and commercial auto insurance. We also provide 24/7 claims service, as well as Legal Assist* services at no additional cost, in case you have any questions regarding legal risks and lawsuits.
We’re dedicated to educating small business owners on the risks of running their business with our industry-leading expertise, and we’re here to help you make the right choices for protecting your small business. Learn more about how TruShield can help you protect your retail business today!
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.
*Legal Assist services not provided for criminal, personal or insurance issues, do not provide representation in legal proceedings or legal fees coverage, and provided by Assistenza International, through lawyers licensed in your jurisdiction.