You may think slip and fall incidents are only a concern if you provide snow and ice management services, but slip and falls, as well as trip and falls, are becoming an increasing issue for landscape maintenance companies.
“There is a direct connection between the increasing advertising by personal injury law firms, the number of claims, and the settlement and verdict numbers post-COVID,” says Josh Ferguson, a partner at Freeman, Mathis & Gary, LLP. “It is directly impacting the insurability of trade segments, the costs to obtain insurance, and the coverage available.”
Ferguson, along with Drew Garcia, vice president of Rancho Mesa and Joe Lewis, leadership consultant with Monarch Landscape Management, will explore common premises liability exposures and risk management strategies, during their session, “Reducing the Risk of Premise Liability for Commercial Landscape Maintenance” on Wednesday, Nov. 5, at 8 a.m. at ELEVATE.
“Legal risk develops from not one but a series of factors,” Ferguson says. “The session will bring together legal, insurance and industry experts to discuss how claims can impact a business and various risk management strategies to reduce exposures.”
Factors Leading to Claims
Poor documentation, unclear scopes of work, inadequate contract language, and insufficient employee training can all leave your company vulnerable to litigation.
Ferguson says contractors can end up being held responsible in situations where the contract requires broad duties beyond what the company was actually retained and paid to perform. Also, if the contract has broad defense and indemnity language where the property owner/manager’s risk is fully transferred to the contractor and their insurance company, even if the accident is the fault of the property, the contractor’s insurance carrier still has to pay for the loss.
“If insurance is available, the carrier will pay out the indemnity payment to plaintiff/plaintiff’s law firm for the settlement or verdict,” Ferguson says. “All claims appear on a company’s loss runs, with the total costs of each claim, which include the costs to defend the action and any pay outs to other parties, like the injured party (called indemnity payment). The larger those dollar amounts, and the larger the number of claims, the more challenging it is to obtain property insurance, and the costs of that insurance skyrocket.”
While there are times a contractor may truly be at fault, Ferguson says more often than not, there are a multitude of factors that lead to a claim.
“This includes the injured party’s own actions, or the actions/inactions of a property owner/manager, or another contractor or third party,” Ferguson says.
Mitigating Liability Risks
Ferguson stresses that documentation is critical for protecting your business from slip and fall or trip and fall claims.
“Insurance companies are less likely to defend lawsuits where they have to rely only on their insured’s word,” Ferguson says. “If the contractor has a contract with clear service obligations, and those services performed are well documented, denying liability becomes less challenging.”
Your operational training can also impact your ability to defend claims.
“If the boots on the ground understand the risk exposures, they are much more likely to report and document problems,” Ferguson says. “So many claims would be more easily defended if there was written documentation, close in time to the incident, that detail communications between the parties, issues with the property, etc.”
For instance, if certain services are declined and the workers understand that could be a potential issue down the road, they know to document and report it.
Ferguson also advises contractors to negotiate for fair defense and indemnity language in their contracts with customers. This protects them from claims that arise from the property’s negligence.
“If the contractor is subcontracting out the work, it is important that pass down to that subcontractor any defense/indemnity the contractor owes to their customer, plus the subcontractor’s obligations to defend and indemnify the contractor,” Ferguson says.
Ferguson says it’s important to understand your insurance portfolio and what is available to ensure full coverage for any and all claims.
If a client refuses to accept any hold harmless and indemnification clauses to their contracts, the contractor should conduct a risk analysis, which factors in the costs and benefits of the contract. Ferguson says this should include reviewing the potential profitability of the site, the risk of the location and if the contractor is servicing the site or if they are passing the risks fully to a subcontractor. He recommends weighing the cost/benefit of each and every project through this lens.
“Regardless of a business’s location or size, there are claim risks, which can include employment claims, personal injury, property damage, workers’ compensation or cyber,” Ferguson says. “The session will provide meaningful tips and strategies to integrate into a company’s business model.”
Want to learn how to protect your business from litigation? Register for ELEVATE and we’ll see you in Phoenix, Arizona!
