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There are certain risks for any online retail business. Whether you’re running a small e- commerce shop or managing a large online marketplace, understanding general liability issues is important. Here are a few of the general liability issues that apply to retailers – plus some information on how your business can avoid common mistakes.
Legal fees and defense costs
Even if your business seems to be doing everything by the book, legal disputes may arise. This can happen for various reasons. Another business might allege your advertising is misleading, a partner might accuse you of breaching a contract, or a customer might sue, claiming one of your products caused them harm. Defending your business in court can be expensive and time-consuming – even when a claim isn’t valid.
General liability insurance not only covers the cost of settlements but also legal fees and defense costs, which can quickly add up even if the case is dismissed. Having this type of coverage in place means you won’t have to drain your resources defending your business. It also provides peace of mind.
Advertising and reputational harm
Advertising can sometimes become a double-edged sword. It’s definitely a great tool for reaching customers and growing a business, but the negative side is there can be liability issues if advertising isn’t carefully handled. If one of your marketing campaigns
unintentionally uses copyrighted material, a competitor might make a claim against your business. Or perhaps one of your ads makes a false claim about a competitor. There may be expensive legal disputes, fines, or public backlash. Negative press from these types of cases can harm your brand’s reputation, meaning lost customers and revenue. Thankfully, insurance covers a variety of cases: general liability insurance by Next Insurance covers advertising injury, as well as legal fees and defense costs, medical payments, and more. By having the right coverage in place, retailers can focus on growing their business, with the peace of mind that comes from protection.
Property damage
Property damage is an issue that can sneak up on online retailers. There may be damaged goods during transit or accidents that impact a third party’s property, for example. Maybe a company vehicle collision causes property damage to a storefront, or one of your employees spills coffee on a client’s expensive equipment during a meeting. Not only would these situations require repairs or replacements, but they might strain relationships with clients and partners. General liability insurance covers property damage to help save your business’s finances and preserve your reputation.
Slip-and-fall injuries
This type of cover applies to non-employees. Slip-and-fall injuries might not immediately seem relevant to online retailers (your store operates online, after all), but this can be an issue if you have a warehouse, physical storefront, or office space that customers or vendors visit. For example, a driver delivering goods to your company warehouse might fall on some ice in the car park. Even if they’re accidents, these cases might mean medical bills and lawsuits. Accidents can happen even when you’re diligent about maintaining company property, which is where insurance gives you peace of mind and protection.
Common pitfalls
Better to learn from others’ mistakes! One common pitfall for retail companies is failing to disclose terms and conditions. Make sure your site has clear policies for returns, refunds, and warranties to avoid disputes with customers and/or suppliers.
Also make sure of sufficient shipping protections. Customers might complain and file compensation claims if their shipments are damaged or lost.
Finally, don’t ignore accessibility requirements. Check the information on the Americans with Disabilities Act (ADA) website and make sure your site’s accessible by people with disabilities.
Regularly reviewing your policies, ensuring compliance, maintaining your property, and having the right insurance coverage can all help minimize risk. Be proactive about these issues to save time and money later.