commercial general liability insurance
In 2014, a person filed a $1.5 million lawsuit against a popular fast-food chain in the USA for providing him only one napkin with his meal. (1)
In 2005, a person sued a popular broadcast company for $2.5 million because they ran a content that made him puke and disoriented. (2)
There are countless such examples around the world of frivolous and ludicrous lawsuits by customers against companies. Admittedly, in the majority of such cases, plaintiffs’ claims are dismissed and the companies in question come out with the win in the court of law. But this happens not without defendants sustaining significant costs of having to pursue the legal course.
In many such instances, the sued companies are big and have a large pool of financial resources to defend themselves. But what if it happens with a smaller company that is limited in resources? Even if they are sued for frivolous reasons, they would still have to spend on legal charges to defend self. Can they afford that expense?
This is where having insurance comes into play. With the right business insurance that provides adequate coverage, one can combat effectively if their customer/client chooses to sue them.
In that context, if you run a business, you should definitely invest in commercial general liability insurance.
Why?
Here are 6 very small reasons your customers can sue your company and you for:
1. They slipped on your property and fell
They are on your property and for some reason, while walking, they tripped and fell.
They can sue you with claims like water was spilled on the floor, the floor was slick, something was lying on the floor, or anything else.
(This is, in fact, a very common reason why business owners are sued by customers/business visitors.)
2. They discovered you using their copyright material
This reason is more of any third party filing a lawsuit, not necessarily customer.
That image you found on Google and decided to use on your social media may seem innocuous, but that qualifies as copyright (and trademark) infringement.
(Sadly, that’s what many business owners do – especially the new ones. This leaves them in a very vulnerable position.)
If at any time the legal owner discovers their copyright and trademarked materials used by someone else without permission, a costly lawsuit is inevitable.
3. They didn’t like the quality of your offerings
They thought your product is of good quality. But after using, the product failed at their expectations. It didn’t satisfy them; it didn’t offer them the utility value they were looking for.
Your customers can sue you for this.
4. You claimed something online that’s not true
This is getting more common by the day.
To woo the website visitors and edge competitors, you made high-flying claims about your products, services or brand. But if any of those claims turn out to be untrue, customers can sue you.
What if your company isn’t really “award-winning”? What if you say “24/7 support” but aren’t available a lot of time?
These factors can be the basis of a lawsuit against your company.
5. They felt detained on your premise
Disagreements – and even verbal spat – isn’t uncommon between business owners and customers. Maybe the customer felt overcharged and he is reluctant to pay the bill amount; maybe the customer didn’t like the quality of the product and want a full refund.
Sadly, at times, such events can turn nasty when the business owner physically restrain that customer from leaving the premise.
Such forceful detention (and threatening activities) very certainly result in lawsuits.
6. They don’t like you
This isn’t a “small” reason why a customer can sue you; it’s a petty reason actually.
If someone doesn’t like you or your company, they can find numerous reasons and loopholes to file a lawsuit against you.
There are also those people who file frivolous lawsuits just to get compensation.
Protect Your Business and Yourself
These are six very small reasons why your customers can sue your company and you.
Of course, there are plenty of other reasons. As mentioned in the last point, if someone doesn’t like you or someone who is in it for the compensation, they can find any number of reasons to make a legal claim.
So, it’s essential that you cover your business against all these “reasons” or grounds of a lawsuit with the CGL insurance and other specific policies. If not, you will always be in a vulnerable position, exposed to (costly) risks that can virtually jeopardize the existence of your business.
Get in touch with a licensed insurance broker and consult them.
Talk to them about your needs and risks. Discuss and learn more about general liability coverage. Check out Commercial General Liability policies of different insurers; what they cover, what they don’t. Take the help of the broker to customize the policyThe legal document issued to the policyholder that outlines the conditions and terms of the insurance; also called the ‘policy per your unique requirement. And then find the right insurance that suits your case.
Remember, today, getting commercial general liability insurance is no more optional; it’s essential for almost every business owner.
