4 Types of Liabilities for Business Owners and How to Prevent Them


Many business owners are unaware of the liabilities that they may be facing. Liabilities can come in many forms, such as environmental liabilities or financial liabilities. Therefore, entrepreneurs need to invest in insurance coverage for general liability. This way, they are protected even if they encounter liabilities.

Liabilities have the capacity to cause a business to lose everything, so it is best for business owners to be prepared. Sure, liabilities may sometimes be inevitable. However, there should be no excuse when it comes to dealing with liabilities properly.

Business Liabilities and How to Deal With Them

Businesses are always at risk for lawsuits, injuries, and other liabilities. Many potential business liabilities can destroy your business or even put you out of business if they occur. These include workplace accidents, product liability claims, copyright infringement claims, and more.

Business owners must learn how to deal with business liabilities promptly. This way, liabilities will not compromise a business significantly, which might eventually lead to business failure.

Below are examples of business liabilities and tips on how to avoid them and deal with them:

  • Customer injuries

Customer injuries on your business premises or as a result of using your product can lead to legal liabilities and claims. On the other hand, workplace injuries may not be covered by insurance because they are usually excluded from coverage. Business owners should have workers’ compensation policies that cover these types of liabilities so that businesses will not experience any difficulties if their employees end up being injured inside business premises.

However, customer injuries can become a grave matter, especially if a customer gets seriously injured and claims a considerable sum of money from the business. Thus, it is vital to have a good insurance policy that will cover liabilities arising from accidents or injuries caused by your product or services so as not to burden your company financially in the event that accidents happen.

Business owners should also make sure that their business contracts are detailed and cover liabilities that may arise from their products or services. Having a comprehensive contract will help prevent the company from incurring penalties as it is stated in black and white what they should do in the event that customers are injured.

injured person

  • Customer property damage

Customer property damage pertains to damage caused by accident to the property while customers are on your business premises. This time of liability is included in most standard business insurance policies. The liabilities can be easy to deal with if customers are instructed not to enter a particular area, or they have been told that there is construction going on and the place poses many risks for customers.

Customer property damage liabilities may arise from issues such as broken glass doors leading into your building, areas that expose customers to harm, or accidents that occur as they are leaving your facility. Therefore, entrepreneurs should consider business insurance policies that will protect them from customer property damage liabilities.

  • Advertising injuries

Advertising injuries pertain to liabilities that arise from advertising media, such as television and radio. These liabilities can include injuries to viewers or listeners of the advertisement who may be inspired by it and go on to harm themselves in some way after seeing or hearing it. Liability for injuries due to advertisements is not easy to prove unless customers prove that you have been negligent in your advertising.

Therefore, business owners should be more careful about the advertisements they are making. This way, they will not end up incurring liabilities that can be dangerous for their businesses.

  • Product liabilities

Manufacturers or sellers who make defective products may be held liable for any customers’ injuries because of faulty items. If you have a product liability insurance policy, your insurer will pay the expenses that result from litigation related to injuries caused by your company’s products. This includes legal costs and compensation paid to the injured party.

Negligent product liabilities are often the most expensive liabilities that business owners have to deal with. That is why it is best to invest in a good insurance policy right away, so you do not ever end up having to pay for damages like this out of your pocket.

Product liabilities may also include food poisoning or any other type of injury or illness caused by your company’s products. Suppose a customer gets sick from eating food you prepared. In that case, the liabilities may include the costs associated with medical treatment and lost wages because that person could not go to work.

Protecting Your Business Against Liabilities

Business owners will always face liabilities, but they can protect themselves against liabilities by taking precautions and acquiring the right insurance policy. It is vital to make sure your business is adequately protected with a good insurance policy that will cover any damage claims you may end up having to pay for if someone sues your company. If you do not want to deal with liabilities, you need to make sure that you do everything possible to keep liabilities away from your business.

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