Premise liability insurance 101

Also known as "slip and fall insurance" premise liability involves personal injury on your property. But an injury doesn't mean you're liable. We explain the nuances in this guide.

caution side for premise liability
Do people ever visit your place of business? As a small business owner, you may own a property, rent out office space, or work from home. If clients, investors, delivery people, or even your friends stop by, you take on liability.

Should one of your visitors slip and fall at your place of business, would you be covered in an injury claim?

Without an insurance policy that covers premise liability, the answer is no. So, how can you protect yourself from costly insurance claims related to accidents at your place of business? This is your guide to premise liability insurance.

Premise liability insurance defined

Sometimes called “slip-and-fall insurance,” premise liability insurance provides coverage for the liability you take on at your place of business. It could provide liability coverage in situations like the following:

  • As a hairdresser, clients frequently come to your salon. Should one of them slip on a wet floor, you could be held liable for their personal injury.
  • As a mechanic, your work environment is filled with specialized tools. Should a neighboring business owner visit and injure themselves on a piece of stray equipment, you could be held liable.
  • You’re a photographer, your studio set can be chaotic. Should a model trip on a prop or cord and break their arm, you could be held liable.

All of the above examples result in personal injury caused by unsafe conditions on someone’s property. However, for any of them to win a personal injury case, they need to prove the property owner knew about the unsafe environment and did not fix it – that they were negligent.1

When can premise liability be claimed?

Although most commonly known as “slip and fall insurance”, premise liability can also be claimed whenever someone is injured due to unsafe conditions on someone else’s premises (property):

  • slip and fall accidents
  • snow and ice accidents
  • inadequate maintenance of the premises
  • defective conditions on the premises inadequate
  • building security leading to injury or assault
  • elevator and escalator accidents
  • dog bites (unsafe conditions due to a dangerous dog)
  • swimming pool accidents
  • fires
  • water leaks or flooding
  • toxic fumes or chemicals.

Who’s responsible?

Whether you’re a renter or a property owner, you’re responsible for keeping your premises safe. If a failure (negligence) in upkeep or maintenance leads to someone getting injured at your place of business, you could be held responsible.

Your premise could include:

  • Your office, studio, craft room, or workshop
  • Your parking lot
  • The driveway and path leading up to your office
  • Yard or land around your office

If someone is injured on the drive over to your office, you can’t be held liable. But if they are injured after arriving on your premises, you could be—depending on their relationship to you and if the property owner knew about the cause and did not fix it. There are three groups of people who might visit your premises:

Invitees – People who are explicitly invited to your premises, including clients, delivery persons, and repairmen you’ve hired.

Licensees – People who were not invited, but who are not explicitly disallowed to visit your business, including neighbors, friends, and door-to-door salespeople. They are licensed to be there.

Trespassers – Thieves or others who are at your place of business without your consent.

When it comes to trespassers, you’re generally not liable for injuries. On the other hand, invitees and licensees could sue you for the cost of their bodily injury. Without insurance, you’d be responsible for expensive attorney’s fees, as well as any payouts and medical bills.

General liability insurance and premise liability

When it comes to your liability as a small business owner, premise liability is only part of the equation. For example, stand-alone premise liability insurance could help cover the cost of a slip and fall at your artisan workshop, but should a client have an allergic reaction while visiting, it may not cover their medical costs. That’s because their injury is not directly related to an issue with premises maintenance and upkeep.

Premise liability is almost always a part of general liability insurance policies. General liability insurance is a broader kind of insurance coverage designed to protect against client and third-party claims in situations like the following:

Bodily injury – Besides slip and fall incidents, you interact with people in other scenarios. Say you’re a wedding planner. Should you accidentally injure someone at a venue, you could be held liable.

Third-party property damage – As an interior designer, people trust you in their homes. Should you damage someone’s heirloom property by accident, you could be held liable.

Defense costs – In a situation like the above, a client or third party could take you to court to collect damages. Without general liability insurance, you’d be responsible for your own legal costs.

Medical coverage – As a home baker, you sell treats at farmers’ markets. Should a customer have an allergic reaction, you could be responsible for their trip to urgent care.

As you can see, general liability insurance can help cover a wide range of potential claims, including claims related to premise liability.

However, if you think there is an especially high risk of clients or invitees injuring themselves on your premises, you may want to take out the standalone premise liability insurance policy with a higher policy limit for additional coverage.

What isn’t covered by general liability insurance?

While a general liability policy that contains premise liability can help protect your small business from significant risk, however it only covers liability related to clients and third parties. It does not cover:

  • Your employees’ injury – Employees are not clients or third parties. If you work with staff, take out workers’ compensation insurance to protect your employees and independent contractors.
  • Damage to your commercial property – To protect your premises in case of an accident, as well as the business property inside, take out commercial property insurance.
  • Professional liability – For liability coverage against claims of negligence and errors that resulted in the financial loss of a client, you need professional liability insurance.

Protect your small business

When it comes to premise liability, it’s important to look at your physical workspace from all angles. Is your parking lot well-maintained? Could someone trip on your welcome mat? Is there anything dangerous inside your office? Likewise, when it comes to protecting your business, take the 360° view. Be sure to:

As a small business owner, you’re responsible for your own success. That means taking steps to protect yourself, your property, and the people you interact with. Once you’ve covered your risk, you can get back to what matters most—growing your business.

But finding any type of insurance can be tedious task with limited options that actually work for your business. 

Thimble makes business insurance for the 21st century business. It’s fast, flexible, and offered on-demand.

What does on-demand insurance mean?

With Thimble, you can take out insurance by the hour, day, or month. If you freelance from home part-time, take out general liability coverage and professional liability just for the duration of a project.

Taking out a policy requires less than 60 seconds. Enter a few quick details about your business and choose your desired insurance coverage to receive an instant quote. Purchase with a single click, and voila, you have insurance.

Sources: 

Our editorial content is intended for informational purposes only and is not written by a licensed insurance agent. Terms and conditions for rate and coverage may vary by class of business and state.

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