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Commercial Risk Advisor - September 2018
Premises Liability for Building Owners/Managers
Risk Control from Liberty Mutual Insurance
The scope of exposure to liability loss and appropriate
prevention strategies must be well understood by individuals and businesses who
own or manage property.
Such losses can be brought not only by those who are invited
or reside on the premises, but also in some cases, by those trespassing or
otherwise with no legitimate reason to be on the premises.
The following are some tips for ways to help reduce your
premises liability exposures.
Slips, Trips, and Falls
The most frequent and costly financial loss for building or
property owners is slips, trips, and falls to patrons or the public on your
premises. The best strategy to help prevent and control such incidents is to
look first at the design of a number of areas.
Consider the following:
- Floor and walkway surfaces that offer slip-resistant
benefits. Dry floors are, for the most part, slip-resistant by design, but wet
floors can be a problem. Pay special attention to floors at entrances, near
rest rooms, water coolers, cafeterias, and other potentially wet areas.
- Stairways to reduce exposure to falls. Stair riser height
and tread depth should comply with applicable building codes, regulations,
standards and/or ordinances. Each riser must be the same height for the full
flight of stairs.
- Walkway surfaces to reduce exposure to trips and falls.
Adjoining floor surfaces and thresholds should be flush, and changes in level
between ¼ and ½ inch (6 and 12 mm) should be beveled to minimize risk to
surface changes to pedestrians as well as those impaired using wheelchairs,
walkers, etc. Changes in level greater than ½ inch (12 mm) should be
transitioned by means of a ramp or stairway. Refer to applicable building codes, regulations, standards,
frequent inspections of floors and walking surfaces to monitor conditions.
- Make sure
floors and walking surfaces are kept clean.
- Entrance matting with slip, trip, and fall prevention in
mind. Select matting system and surface material for expected environment and
traffic load. Mat edges should be beveled and not curl by design. Keep a record
of inspections to demonstrate due diligence.
Certifi ates of Insurance
Maintain up-to-date certificates for liability insurance
from each of your tenants. Verify that each tenant names you as an “additional
insured” on their general liability policy. Tenants should each have their own
separate liability insurance that should also protect you, as your primary
layer of protection, when they are at fault or if a suit is brought against
them. Your legal counsel should advise you how to review these certificates to
ensure that you are adequately covered. Your legal counsel can also advise you
regarding the tenants’ policy limits and if that is suitable for the amount of
risk you bear.
The best strategy to help prevent and control fires is to
know the appropriate control measures for your tenants’ fire exposures. For
example, cabinets for flammable liquids, fire sprinkler protected booth for
spray painting, and UL (Underwriter’s Lab) compliant extinguishing system for
deep fat fry cooking. The National Fire Protection Association (NFPA) has
numerous fire prevention, detection, and suppression standards that contain
helpful reference materials. Get familiar with those that affect your building
and your tenants.
Heavy rainstorms or snowfall can cause substantial property
damage and can contribute to roof collapse. This damage typically occurs when
water pools on the roof forming ice dams or infiltration when the temperature
This type of loss scenario can best be prevented and
controlled by soliciting the guidance of a professional roofer to:
- Inspect the roof drains before the rainy/winter season to
make sure they are clear of leaves and debris, check to see that the gutters
and down spouts are in good condition, and make sure they are adequate to
handle a heavy downpour or quick snow melt.
- Periodically check to see that your roof is in good
condition and that there is no evidence of water pooling, leaks or mold.
Properties with restaurant occupancy can have potential fire
risks in the kitchen. Hoods and other ventilation systems should be regularly
cleaned and inspected. Restaurants using vegetable oil in their deep fat fryers
should have a UL compliant automatic fire extinguishing system.
Portable fire extinguishers should be inspected and serviced
by a qualified contractor at the following intervals:
- Annually with the tag marked, noting the date and name of
- When the indicator moves into the red zone.
For buildings with automatic and supervised sprinkler
systems, a main drain and flow test should be conducted at least annually or
more depending on local jurisdictions.
Outside contractors brought on to your premises to perform
work can create a significant liability risk to your business.
Some examples include:
- A plumber using a torch that ignites some building
materials, resulting in both property damage and a business interruption claim
— both a direct financial impact to you.
- A sign installer who wires a light fixture incorrectly which
results in a fire.
- A landscaper who leaves tools out that someone trips over.
These types of losses can best be prevented or controlled
- Pre-qualifying potential contractors ahead of time and
- Developing a list of approved contractors who have provided
you with a certificate for liability insurance and workers compensation. Check
their contractor’s license number at the
appropriate state website and obtain references from prior customers.
- Obtaining a written contract approved by your legal counsel
for the work to be done by other service providers or contractors with insuring
agreements that offer ‘additional insured’ for your primary protection.
- Inspect the jobsite frequently for hazards under your
control. For those under their control, be certain it is an expectation that
both parties agree to in the contract for work undertaken.
Neighbors and Tenants
Be aware of potential fire and liability exposures presented
by neighbors and tenants. For example; a plastics manufacturer, woodworking
operation, or tire storage facility can each present significant fire
exposures. Child or senior day care facility create additional liability
Have an effective system to inspect and maintain exterior
walkways, grounds, and parking lots to ensure that they are in good repair and
free of potholes, foreign objects, trash, clutter, ice, and snow. Make sure
outdoor lighting fixtures are well-maintained and located where risk is
greatest for both personal safety and security reasons.
Provide adequate security for all areas of public access
commensurate with the type(s) of tenants and the location of the property.
Frequent property inspections of both the interior and exterior, with written
documentation are recommended, and are extremely valuable for claims defense.
Be certain to solicit the input and guidance from local law
enforcement and crime scene analysts to determine crime patterns for incidents
that would otherwise help justify greater security protections. In some cases,
building owner’s or property manager’s failure to provide reasonable security
to the crime victim against a foreseeable criminal attack can be a legal
“cause” of the occurrence.
Additional resources can be found in the following Liberty
Mutual Insurance Risk Control reference notes.
- Controlling falls on stairways, RC 5158
- Crowd management and control practices, RC 5285
- Emergency preplanning for workplace security, RC 5341
- Keeping your retail business invitees safe, RC 5252
- Preventing slips and falls: floor cleaning and maintenance,
- Preventing slips and falls: floor surfaces and treatments,
- Preventing slips and falls: selecting the right matting
system, RC 5408
- Preventing outdoor same level slips, trips, and falls, RC
- Retail robbery precautions, RC 5019
- Using snow logs to manage outdoor slips, trips and falls, RC