How Can My Small Business Deal With A Liability Claim?
Owning and operating a small business can feel like a dream come true. However, this achievement also carries its fair share of liabilities, such as a negligent act of an employee, a claim for a defective product, or a slip-and-fall lawsuit. All it takes is a single claim to damage your business reputation – that’s why it is essential to plan ahead and know what to do if someone files a claim against your small business.
One way to plan ahead is having small business liability insurance. This will protect your personal and business assets if someone is injured or suffered damage because of your business, the operation, or your products. The insurance may pay for medical and legal expenses, monetary and property damage losses – however, the exact coverage will depend upon the policy you buy.
If someone does file a claim against your business or threatens to sue, take the following steps to protect your business:
Inform your liability insurance provider immediately about the claim or complaint.
No one expects to receive a liability claim or a threatening call against their small business; however, it could happen. There may be a day when you have to use your small business liability insurance and file a claim.
If that day comes, contact your liability insurance provider immediately to inform them about the situation and find out if your specific case is covered by your insurance. Provide them with the details of the complaint and pertinent details of your insurance such as your name, business name, policy number, type of coverage, and description claim.
Reporting it to your insurance company promptly makes it easier for them to investigate and resolve your claim quickly. Also, a delay in filing the claim may jeopardize your liability coverage.
Defend a liability claim with documentation
Be sure to keep complete records about the person or entity complaining or threatening to sue your business and the situation at hand. These will help your liability insurance provider upon their investigation.
Start gathering documents such as contracts, receipts, or service agreements. Also, write down any communication or evidence you have with third parties that are involved with the claim. Have a record of phone calls, emails, or face-to-face conversations.
Do the same with any communication with your liability insurance provider. Get messages in writing, and note when you contacted them and what you have discussed with them. If your insurer requests copies of anything, keep a copy for yourself too. This documentation will help ensure your insurance company honors your policy to its fullest extent.
Cooperate with your liability insurance provider
As part of your liability insurance coverage, your insurer will provide an attorney for your case and they would require cooperation on your end. Don’t hide any information from them and respond to them promptly. Also, take some time to help them as they dig through your records for more information, create a timeline of what happened or your relationship with the complainant.
Find a business lawyer to help you deal with a liability claim
The ideal situation for any small business owner is to have a reputable and informed lawyer on call to give counsel on how to avoid liability claims in the first place. If you find yourself in legal hot water, your attorney will be able to guide you through the best course of action for either diffusing the situation or ensuring the case is handled properly.
If the liability claim turns into a lawsuit, working with the attorney your insurer provides is good but having a trusted business lawyer on your side could give you peace of mind that they have your best interest in mind. He or she will guide you throughout the process and also deal with your insurance provider as your attorney already has working knowledge about your small business and the history of the case.
Protect your business with HHP Law Group by your side
If you are a small business owner who wants to protect your business from any losses or currently dealing with a liability claim, let HHP Law Group help you. Our experienced Columbia business lawyers can assist you with any legal matters related to your business so that you can focus on day-to-day operations and growing your company. We are here to help resolve potential business disputes by assisting you to legally protect your business and handling any legal issues that may arise. Call us today at 803-400-8277.