Small Business Liabilities to Look Out For With Employees

Employee actions and negligence can be a cause for a business to receive a complaint or claim from customers, vendors or other employees. In these occasions, appropriate disciplinary action must be taken, which may include termination of employment. Small business owners should have liability insurance for these occasions specifically. Having to pay out-of-pocket for legal expenses, medical expenses and other damages can cause extreme financial distress to the company.

Employee Induced Physical Injury

There are occasions where employees lose their cool and it leaves a customer or another employee with an injury. Not only can this employee face criminal charges from local law enforcement, but your business is also held liable for damages and injuries. This is an ideal example of why having proper insurance coverage as a small business owner, is a must.

Employee Verbal Damage to Customer

Employees can use words, either verbally or written, to cause emotional and/or mental damage to a customer. The same can happen with a fellow employee. While these claims are difficult to make sense of, it is important to investigate thoroughly, especially by viewing video surveillance footage, to see who was at fault. The video surveillance equipment inside your business should be equipped with sound to capture verbal exchanges for these reasons.

Intentionally Tainted Products

Sometimes employees mess around and add “items” to a product or food item that have no business being in them. Sometimes it is bodily fluids, sometimes it is a chemical and sometimes parts of a product are intentionally removed. This can cause serious harm to others, especially co-workers and customers. Terminate these employees immediately, and inform local law enforcement as charges may be required, depending on the situation.

Company-Owned Vehicle Accident

If your business has company-owned vehicles and it is involved in an accident, your employee may be at fault. This means that your business is liable for any and all damages that resulted from the accident. You must carry auto insurance as a small business owner, and should have ample coverage for personal injuries and property damage.

Unsafe Employee Behavior Resulting in Injuries

Although rare, employees may act out while on-the-clock, which can result in making the work area unsafe. In a restaurant situation, employee shenanigans can lead to customer injuries. Other employees can be injured, as well as the building itself. Although the employee is at-fault, the business is liable for any and all damages resulting from this employee’s behavior. It is a sticky situation to be in, but terminating employment and handling damage claims swiftly can help remedy the situation.

Closing Thoughts

Employees do make mistakes. Whether these mistakes are accidental or intentional, the business is still liable for the employee’s actions. Without proper liability insurance coverage, you, as the small business owner, would have to pay all claims out-of-pocket. This can financially damage your business, and its reputation in the local community, to the point of business closure. When handling claims and instances of employee misconduct, maintain an approachable and personable demeanor to help maintain the reputation of the business, and you as the owner.

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