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Business Protection Bulletin

Do You Know the Most Common Liability Losses?

By February 2, 2015No Comments

Classic Causes


If your first answer was slips and falls or other premises liability issues, you are correct. These classic causes of liability loss still occur frequently. Rental properties are particularly prone to attract liability claims.


Food Preparation and Processing


The second category is food preparation and processing. The increasing frequency in these numbers concerns the insurance industry. Some hidden long-term issue similar to the asbestos disaster may be lingering in preservatives or other common chemicals used in food. There have been plenty of scares associated with long-term exposures like alar (proven false) or red dye #2.


Computers and Mass Communication


Computer and communication driven liabilities come in a strong third. Cyber-attacks, social media miscues and intellectual property litigation becomes more common daily.


The high cost to litigate and mitigate these computer losses combine for a high severity problem as well.


Professional Services and Management


Professional services and management claims occur with greater frequency. Professional liability, especially among lawyers and medical providers, has become very commonplace target.


Employment practices claims, a relatively new source of liability actions, increase in numbers monthly. The trend is definitely an increase for the foreseeable future.


Director and officers liability claims have increased substantially over the past few years.


Environmental claims play a role in each of the other liability issues.


Notice the claims trending greater frequency have little to do with operations and premises. Management, leadership, communications, computer interface and pollution are the sources of claims in the future.


Companies need to renew their risk management diligence in these areas. Employment practices claims can be reduced through proper procedures. Invest in educating your human resource group in handling sexual harassment complaints and hostile workplace incidents.


Rules for company use of social media and email/text content need to specifically exclude offensive content. Employees need to know how to avoid incoming content from phishing sites or hackers.


Environmental audits should be completed on an ongoing basis as needed. Documentation is critical in this area.


Overall, risk management must take a hard look at increasing specific underlying coverage and increasing umbrella limits.