In a business setting, “general liability” refers to businesses being held liable for damages caused to visitors (customers, vendors, etc.) who are injured while visiting the premises. These types of accidents are generally covered by the business’ commercial insurance policy (also referred to as a “Commercial General Liability (CGL)” policy). These policies do not apply any harmful actions done by employees while working.
Although most businesses carry general liability insurance, legal disputes can still arise between the business and visitor who is injured while on the premises. In turn, a lawsuit may be filed if the amount of insurance does not cover the injured party’s medical bills or the insurance company denies coverage for the accident.
Some instances where a business may face general liability include the following:
- Slip and Fall Accidents: This is probably the most common claim that’s raised against businesses, especially in retail stores.
- Accidents Caused by a Dangerous Structure: Structures can sometimes present dangers to visitors if they break or are displayed in an unsafe manner. Some examples are display shelves, tables, overhanging ledges, and broken furniture.
- Stairway Accidents: Poorly maintained stairways and walkways can present hazards for guests, customers, and visitors. Generally, a business owner needs to maintain all stairways. If any potential dangers are present, the business should put out a warning sign to put visitors on notice of the condition.
- Structures that Have Not Been Properly Repaired: If a structure is kept in disrepair, even though it would generally be otherwise safe, the business will be liable if the structure injures a third party. Some common examples of this are rotting wood, broken glass and unstable structures.
Often, landlords of commercial units will require businesses to have a CGL policy. However, this does not mean that the business owner is fully responsible for all care and maintenance of the unit. While it can vary, depending on the content of the lease, if there is a major problem and it causes injury to a visitor, it is possible for the landlord to be responsible.
or example, if a pipe burst in the building in the unit or a nearby unit and the flooding caused water to pool around the entrance of the store. A visitor slips and falls, and then becomes badly injured. In this case, who would be responsible?
Most likely, both the landlord and the business owner would hold some level of responsibility. The business owner may not have access to shut off the water; they tried to control the amount of flooding and kept the area as clear as possible; and has made every good faith attempt to contact the landlord. In that scenario, then the business owner acted responsibly.
However, they could have also closed the store for the day. While they would have lost profit, they could have held the landlord liable if the landlord refuses to repair. If the landlord is avoiding the issue or completely refuses to fix the situation, and their delay was a reason for this disaster, then they could also be held liable.
While this example might sound far-fetched, things like flooding can happen and often people and property can be badly damaged. It’s important to know that in situations like these, business owners facing a lawsuit for injuries in their store don’t always have to take the blame (depending on the situation).
As noted above, a business may encounter a situation where the insurance company declines to pay any money for an accident that happen that occurs at a business. This will generally occur if the insurance carrier determines that the business was directly liable for the injuries caused or acted with gross negligence. Additionally, the business and insurance company may disagree about that types of losses are covered under the contract covering the insurance policy.
If you are sued by a visitor who has been injured on your premises, your insurance carrier will likely have in-house or other retained attorneys to deal with the matter. However, you should make sure that this is part of your contract before choosing a carrier.
In addition, to help resolve a dispute about coverage you should consult with a business attorney to analyze the contract covering the insurance policy and offer their opinions about what types of claims are covered under the policy.