Customer personal injury claims can be costly and very damaging to a retail establishment’s reputation. They can be much more frequent than employee claims in some types of stores, especially warehouses that allow customer access.
Employee safety programs are not sufficient to protect customers, who are at risk for many more accidents than employees for three primary reasons:
- Customers expect the store to be safe.
- Groups like children and the elderly are predisposed to injury.
- Customers do not receive safety training.
Understand to what extent you are liable for customer injuries on your premises and take steps to prevent injury.
You are required to maintain safe premises for your customers; in legal terms, you have a high duty of care. This includes the duty to warn customers of non-obvious, dangerous conditions that you know about, to use ordinary care in active operations in the business and to make reasonable inspections to discover dangerous conditions and make them safe.
Most customer accidents are preventable, so it is important to take steps to make your establishment safer and less exposed to the risk of customer injury and litigation.
Common injuries that could become your liability include:
- Slip and falls as a result of wet floors, torn carpets, poor lighting or escalators. This type of injury is extremely common.
- Head and body injuries from falling objects, retail displays, out-of-reach objects or other mishaps.
- Shopping cart injuries as a result of the cart tipping
- Overcrowding injuries, e.g., trampling.
- Parking lot injuries as a result of cracked, improperly designed lots or failure to remove ice or snow.
Methods of Prevention
Steps you can take to minimize the risk of a customer claim include the following:
- Identify high-risk areas of the facility (such as where liquids are frequently spilled or tracked), and set up an employee inspection schedule to ensure it does not become a dangerous condition.
- Install video cameras to more efficiently monitor the premises for dangerous conditions and provide proof in case of a claim.
- During snowy, icy or rainy weather conditions, take care of dangerous situations on sidewalks, stairs and parking lots promptly.
- Ensure proper lighting in all areas of the store, and check on a regular basis that all bulbs are functioning. Document your inspections.
- Ensure that displays are stable, and always put heavy items near the bottom of shelves.
- Properly maintain and inspect shopping carts, and discard those that present a risk of tipping.
- Control crowds, especially during busy seasons or large sale events, through physical methods, such as entry turnstiles.
- Design parking lots to avoid injury. Repave, repair and check for hazardous conditions regularly. Document these inspections.
Criminal accident teams can stage injuries, targeting several businesses in the same area. This fraud could cost you millions of dollars in unwarranted payouts. Evaluate this possibility in the event of a customer injury claim, and notify the National Insurance Crime Bureau if you have a suspicion.
Liability insurance addresses the cost of legal damages and claims up to policy limits. Work with Scurich Insurance to design the liability package that fits your business–you will be able to select from a wide range of coverage options that you can tailor for your unique needs.
Inventory shrinkage—a combination of employee dishonesty, shoplifting, vendor fraud and administrative error—is costing U.S. retailers a great deal of revenue.
According to University of Florida criminologist Richard Hollinger, director of the Security Research Project, the single largest larceny category occurs in retail stores, yet employee theft can occur in any industry. The survey found that the most significant source of inventory shrinkage is employee theft.
In addition, Insurance Journal claims that the most trusted employees—the ones who have been with the company for a significant period of time and who never miss a day of work—are the most likely to steal from their employers.
Protecting Against Inventory Shrinkage: Employer-Generated Solutions
Pre-employment screenings should consist of the following:
- Past employment history
- Criminal conviction checks
- Personal reference checks
- Drug screening
- Driving history checks
Employee awareness programs can help to deter employee theft:
Typically, employees do not steal from their employer once and then never do it again. Instead, employees steal small amounts over an extended period of time. When businesses finally discover the indiscretion, they have lost a significant amount of revenue.
- New hire orientation discussions
- Bulletin/poster board notices
- Anonymous phone hotlines
- Follow-up education
- Payroll stuffers
Use asset control policies to safeguard inventory:
- Refund control structures
- “Void” receipt procedure
- Employee package checks
- Trash removal controls
- Inter-store transfer policy
- Exit door controls
Loss prevention systems can help secure your business:
- Burglar alarms
- Closed circuit TVs
- Armored car pickups
- Secured display fixtures
- Electronic security tags
- Shoplifting signs posted
- Silent alarms
- Observation mirrors
In addition, businesses generally do not discover that funds are lost until the economy enters a downturn and the company examines why their revenue is not as they had expected. Only then, after questioning where the money went, do they notice that funds are missing.
Smaller companies with fewer employees tend to be victimized more than larger companies. Not only are these smaller businesses uninsured to cover their losses, they’ve built up trust and developed relationships with their employees. So, they often are unsuspecting of the criminal activity and trust their employees too much. Larger companies also have the budget for audit committees and risk managers to assess any indiscretions immediately.
Employee dishonesty insurance, also known as crime coverage, employee dishonesty bond, fidelity bond and crime fidelity insurance, offers employers protection from fraudulent acts committed by their employees. By purchasing this type of insurance, you are able to recover financial losses as a result of employee theft and robbery of the following:
- Computer fraud
- Funds transfer fraud
- Credit card fraud
- Money order and counterfeit fraud
- Other valuable property
Third Party Coverage
If your company is doing business for another organization, employee dishonesty insurance may also cover the losses of that business as your client, depending on your plan.
If you elect coverage that protects your client’s property, the policy will cover the loss of money, securities and other property lost while working for that client.
There are several exclusions to these types of policies that employers must be aware of:
- Accounting errors
- Income lost in the event that the theft had not occurred
- Governmental seizure of property
- Restatement or lost statement of profit
- Theft by yourself–coverage does extend to partners, trustees and directors
Don’t become a victim of employee theft or shoplifting. Protect your business, your assets and your profits by obtaining employee dishonesty insurance. Contact us today at 831-661-5697 to learn more about our value-added services.