Commercial liability: a minor mistake – major consequences

Commercial liability: a minor mistake – major consequences

Nobody is perfect – everyone makes mistakes now and then. But some mistakes have more serious effects than others. This is particularly so in business. Here, small slip-ups can have far-ranging consequences.

This is embarrassing, time-consuming and costly

"That's just not possible," is what everyone thinks when reading about yet another spectacular recall in the newspaper or on the Internet. But in fact, it is not the dramatic headline-hitting cases that cause headaches for Swiss companies. Instead, it is the everyday mistakes that turn out to be embarrassing, time-consuming and often costly as well. When the cleaner leaves the master key to an office block on the train.

Master key left on the train!

A instant of carelessness

In 2015, Swiss insurers paid out 1.1 billion Swiss francs because companies or their employees caused third parties to suffer loss – whether customers, business partners or the company's neighbors. Most of these losses falls into the category of "things going wrong". Someone was absent-minded for a moment, miscalculated, failed to adjust a machine correctly or reached into the wrong compartment. And who can argue that they never do things like that?

A room fire in the luxury suite

The most common event of a loss is property damage due to repair work on the customer's premises. This can be caused, for instance, by a washbasin slipping to the floor during assembly and shattering a number of tiles. In the experience of the industry, the second most common type of liability claims are due to financial loss resulting from a mistake made at work. A typical case: Workmen cause a room fire in the presidential suite of a luxury hotel. As a result, the room cannot accommodate guests for a number of days.

When customers are injured

Astonishing, but true: classical production errors are only in third place in the list of the most frequent liability cases, such as the series of coffee makers with safety defects which therefore have to be recalled. The costs are included in basic insurance or covered by an additional module. In fourth place among the most frequent events of a loss is injury to customers. Perhaps someone slips on a wet surface or a visitor to a fitness center sustains an injury from an incorrectly adjusted piece of equipment.

The unfortunate watchmaker

In fifth place is damage caused during loading and unloading. Materials are delivered to a builder. When they are unloaded, his technicians lend a hand and damage the door of the supplier's brand-new van. Equally frequent, but only insurable through additional coverage, is "direct consequential damage". An example is the unfortunate watchmaker cleaning an antique grandfather clock who finds that the pendulum breaks off.

Defense against unjustified claims

Commercial liability insurance is worthwhile for every company so that the stress with business partners or customers is not exacerbated by unforeseeable financial consequences. The insurance not only pays justified claims, but also defends against unjustified claims. A diner at a restaurant may get stomach problems one hour after eating tiramisu. But the reason was not the dessert. It was his new medication.