Premises liability coverage covers guests who are injured on your property. In all states, the law requires that property owners make every effort to ensure that guests are safe.
Understanding what premises liability coverage entails is the first step to understanding why you might need it. Premises liability refers to the idea that businesses are responsible for keeping their premises safe for visitors. The business is responsible for any injuries or damage that occurs on the premises. The business could be sued or subject to claims. Although every state has its own laws regarding premises liability, each state may have their own definitions of coverage. This could include licensing, invited, or trespassers.
What is Premises Liability?
The property is granted permission to both the invitee and licensee visitor. The licensee visitor is invited, but not invited. Legally, the invitation to use the property signifies that you are committing to the property’s safety.
Although they may not be invited, a licensee can still expect reasonable safety. A licensee could be a delivery driver, utility worker or other person who needs to access your property in order to perform their job.
Trespassers have limited rights. If a trespasser gets hurt while on the property they cannot collect from the owner. In most states, however, the property owner must maintain the property in a satisfactory manner and not attempt to harm the trespasser with traps.
There are exceptions to this rule, however. Trespassers should be warned of any non-obvious dangers. This could be an indication for a swimming pool considered “attractive nuisance” by children. In this instance, property owners would be held to a higher standard of care.
It is essential to read the state laws in order to fully understand your state’s liability as a business owner. Visitors, including those who are trespassing on your property, may be liable to you for a high degree of care and safety.
Types of Premises Liability Exposures
When a business is addressing premises liability, there are many types of exposures. Some examples of exposures include but are not limited:
- Slip and fall accidents: It doesn’t matter if the floors are slippery because of a wax coating or because water was spilled, this can be a liability for the business owner.
- Inadequate Maintenance: Even something as simple as a railing that needs new bolts could lead to serious injuries or liabilities.
- Low security: Businesses are liable if they do not have the security measures or personnel in place to stop people accessing high-risk areas.
- Defective conditions If someone falls from a chair that has been found to be defective and then hurts themselves, the company is liable.
- Escalator and elevator accidents: A business owner might be held responsible if someone falls off an escalator without warning and is then injured by the belt that feeds back into the system.
How Premises Liability Insurance Works
Premises liability protection protects business owners against claims arising from property damage and premises injuries. This coverage can be purchased separately or as part of a General Liability Policy. The limits can be purchased separately and are often greater than the general liability policy limits.
Important Exclusions from Premises Liability Insurance
Premises liability does not cover all types of injuries or property damage that may be caused on the premises. These exclusions include:
- Professional negligence: An error or omission in the care of a professional can result in an injury to a person.
- Premises liability: Employee injuries Workers’ compensation insurance covers them.
- Own property of a business: To cover losses to their property, a business must have commercial property coverage.
What are the Covered Shared Premises?
Sometimes, a business owner might lease property owned by another company or person. This can complicate premises liability. The business lease generally transfers all liability to the business, and away from the lessor. The business and its customers are entitled to reasonable care regarding the safety and maintenance of the property.
In cases where the business owner expects reasonable care, the property owner is liable. Parking lot maintenance might not fall under the business owner’s responsibility. Therefore, the property owner would be liable. Elevators and escalators are also the responsibility of the building owners.
Premises Liability Insurance vs General Liability Insurance
Although they may be mistakenly referred to as one and the same, general liability insurance and premises insurance are not. Although premises liability insurance is a part of a general policy, it can also be included in broader coverage.
Premises liability insurance protects against claims that a property isn’t maintained properly or a visitor is injured. General Liability Insurance provides greater protection, including personal property coverage and claims that result from business operations. For example, a homeowner might trip on a handyman’s tool bag and get hurt.
Why do you need a standalone Premises Liability policy?
If you require greater protection for your property, a standalone premises liability policy is a good choice. This is often the case with vacant land, or land that will soon be built on. Contractors’ insurance covers other general liability claims. A premises liability policy would include builders’ risk insurance.
Is General Liability Insurance enough?
A general liability policy that covers premises liability and other issues is acceptable for most small-business owners is fine. If you feel that the limits of the general liability policy are too restrictive, you can get an umbrella policy or increase them.
You, as a business owner are responsible for providing a safe environment for customers and employees. You are responsible for any injury claims that may occur on your property. However, you could also be liable for any lawsuits brought against you by fraudsters. Premises liability coverage protects you against fraudulent and real claims.