Is your facilities portfolio
expanding? Take a minute to catch up on loss reduction and
prevention – it could save you
untold heartbreak and money.
These tips will help you minimize injury, loss, and financial exposure by optimizing your organizational practices and understanding the legal landscape.
Be Safe from the Start
You must consider the safety of everyone who will be on site: employees, customers, visitors, delivery people, inspectors, contractors, architects and planners, police and fire personnel, and anyone else who comes to your property, even trespassers.
First, make sure your insurance agent has covered these issues in your commercial general liability (CGL) policy:
- Is there an exclusion for construction on the premises?
- Is there an exclusion for “third party over action” by a contractor’s employee who is injured on the premises and brings a negligence claim against the property owner?
- Is a separate premises pollution policy advisable under the circumstances?
Apply the same scrutiny to tenants and contractors – you may be liable for their negligent acts, so screen them carefully. Leases or contracts must require tenants to supply you with adequate documentation of the safe nature of their activities, due diligence performed in selecting employees, their company’s safety record, monitoring practices on site, and emergency and damage plans.
Most importantly, be sure you are a named insured on their CGL, Builder’s Risk, and other insurance policies, and that you will receive written notice of intention to lapse policies for non-payment or other reasons. Try to obtain waiver of subrogation clauses as well. Depending on the circumstances, consider requiring a premises pollution policy.
Leases and construction contract documents must contain clauses holding you harmless and indemnifying you for losses caused by the contractor or tenant. Consider requiring bonds or letters of credit to guarantee payment of these obligations if they are not insurable.
How to Build Your Safety Plan
You need to create a well-organized, practical, usable safety plan for operations, maintenance, and emergencies and appoint a safety officer with real teeth to administer it.
Why do you need a safety plan? Apart from any ethical benefits, the plan saves you money. Possibly big money. And as you know all too well, the law is in love with paper. Files full of it (or gigabytes of it, as the case may be).
And that safety officer? He or she needs sufficient power to shut down a dangerous situation immediately, and management should make it clear that appeals on the safety officer’s decisions are granted rarely, if ever. Everyone must know where they can ask safety-related questions and confidentially report violations with no risk of repercussion.
This plan doesn’t belong in a dusty old file cabinet in the office. It must be practiced daily. It never rains when you bring your umbrella, but it always does when you forget it. Don’t be lulled into complacency.
Whatever the size of your business or property, a safety plan is essential to minimizing the risk of injury and property damage and defending yourself if accidents occur and claims arise against you. Include a requirement to call authorities or medical help as necessary in the event of an incident. Call your CGL carrier as well (and then write them by certified mail).
Provide guidelines for evacuation and other procedures in case of fire, crime, disaster, armed assault, leakage of dangerous or environmentally harmful substances, and other emergencies. Be sure to include an immediate call to your state’s Department of Environmental Protection if there is a spill. Most states impose hefty fines for failure to call promptly.