Premises Liability and Loss Control

The application of risk control and loss control with regards to your premises of where you do business is a sound business practice.

Risk Control: Loss control of your premises is usually easier done than risk control of your product liability. Most small business owners only have one location versus their products might be delivered all over the world. Most insurance carriers will do a physical premises inspection so that they can see with their own eyes what type a risk they have insured.

Inspections: Sometimes this inspection is done by independent third party inspectors on behalf of the insurance company. The inspections might even be something as simple as a drive by just to make sure the premises has good housekeeping and is not in disrepair can create a premises liability exposure on its own demerits . For sure at a minimum, in this technological day and age, the insurance underwriters will Google your premises address and take a Google view of your premises and surrounding locations. In the past, most insurance companies cannot afford to do physical inspections on the accounts that generate less than $1,000 in premium. Nowadays somebody is probably looking at your premises description and housekeeping through Google, Bing, or Yahoo.

Contractural Liability: Many insurance carriers are excluding contractual liability coverage but will consider them on a case-by-case basis. The premises and operation exposure for your business also includes the contractual liability. In the under writing process in the carrier will probably ask what kind of contracts do you enter into with your vendors and/or clients. You need to review carefully the contract that you enter into because contractually while you may personally be on the hook for the legal document that you sign your insurance carrier will not always provide insurance coverage for back you up. Even if your business is a home-based business, the insurance carriers can want to know what kind of premises liability exposure they are providing liability coverage for. Depending upon whether your products and services are consumed on the premises or off premises or even possibly delivered or mailed to other locations will have a direct effect on your insurance premium pricing. The underwriter is good I want to know and understand all services and operations that can or will happen on your premises.

Key Controls: Some of the key risk control measures that the underwriter will be looking for on your premises are worth noting in advance to help you secure the best pricing available. One of the premises risk control measures they are looking for is whether or not the public comes onto your promises. If you’re strictly an Internet business working out of your home with no public access your pricing will be considerably reduced. On the other hand if you are a home-based business and you have the general public entering your home based business that can create additional exposures that most carriers do not want to take on. The main reason for this is it will be hard for the commercial insurance carrier to differentiate a claim as to whether it was a personal homeowner claim for liability or a commercial business liability claim out of your products and services. Providing premises loss control and risk control is an important part of your insurance portfolio.

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