Editor’s note: This article was originally published on October 9, 2013 and was updated on October 2, 2015.
When you open a bricks-and-mortar business, you’re looking forward to being an entrepreneur, serving your community, and having a successful business. What you typically aren’t expecting are people who are just waiting to take advantage of you specifically because you own a business.
This story, unfortunately, was inspired by true events. An acquaintance of mine owns a service business, and has faced two lawsuits within the last three years from clients who “slipped and fell” on her premises. In both cases, the business owner felt that they were deliberate attempts to extort money from her business, because both times the “slip and fall” were questionable. Luckily, she was protected because she had purchased the proper business insurance, but the whole thing could have gone very differently if she hadn’t.
Preventing Slip and Falls
Unfortunately, there is no way to really prevent someone from having an accident that isn’t really an accident. If a fraudster wants to, they can always find a way of “tripping” and falling on your premises. In this case, the only prevention is to have a solid business insurance, and we’ll cover that later. What you want to do is make sure that you have safeguards in place that your insurance company wants to see if such an incident were to occur, such as regular shoveling and salting of your outside premises in winter, and handrails for stairs.
The only prevention is to have a solid business insurance.
The only way to really know what they want is to ask your broker. The best strategy is to consult with them, and then go make the necessary improvements to your store. If you have everything the insurance company wants to see in place, there will be less chance of a settlement for an intentional fraudster, and better safety for your well-meaning clients. It’s a win-win.
Preventing Shelving and Display Collapse
If you have a number of shelves and displays in your store, have a contractor come in at least once a year to do maintenance work on them. Shelves bearing loads over a long period of time can develop issues such as loose bolts. Try not to have any shelving that isn’t properly secured to the frame or the wall, as a customer can easily knock these shelves loose.
If manufacturer’s reps come into your store to set up point-of-purchase displays, make sure they’re customer safe before they go up. Some items, such as aisle violators (displays designed to stick out of shelving) can be hazardous if they are too long or contain prominent metal components. Always have a senior staff member present or be there yourself when a manufacturer’s rep is in the store. They’re well meaning, but may not be thinking specifically about liability concerns for your store.
If you own and operate an establishment that serves food to customers, you’ll already have health regulations to meet that you’re already observing, such as keeping the premises and food preparation areas clean and proper hand washing for all staff. However, as with preventing slip-and-falls, it can’t hurt to have a “what if” conversation with your insurance broker to see what items the insurance company wants to see over and above what you’re already doing. Again, this can only improve your customer’s experience and further safeguard your business.
Install Video Camera Security
This is an expensive step, but if you’re in an area where you are concerned about clientele, or you are concerned about shoplifting as well as liability, video camera security will ensure you have a recording of events that law enforcement or your insurance company wants to see. If you have signs posted that your premises are under video surveillance, a fraudster may think twice about attempting to defraud your store.
An experienced fraudster will do their best to fit in by looking like the rest of your clientele.
How Can You Spot a Fraudster?
Short answer: you can’t. In my friend’s case, they were both clients that purchased moderately-priced services from her, and they didn’t act sketchy at all until right after the services were performed and they were on their way out. An experienced fraudster will do their best to fit in by looking like the rest of your clientele. If you join your local chamber of commerce, you may be able to get tips from fellow business owners on chronic fraudsters in your community, and watch out for these specific people.
Get a Licensed, Experienced Business Insurance Broker
Go to an insurance broker who specializes in business. Not only can they make sure you have the best protection against fraud, but often they’ll be able to find you cost-effective packages that are designed to cover your specific niche from different insurance companies. Best of all, an experienced business insurance broker has seen everything and knows what you can expect. Find someone who wants to get to know you and your business, not someone who just fills out forms and sends you a policy once a year.
If you have any questions at all about business insurance and preventing insurance fraud at your business, contact us to get the benefit of our experience.