Business Property Liability Insurance Claims

The law requires business property owners to do everything reasonably possible to make their properties safe. They must have adequate safeguards to protect visitors from avoidable harm. Still, people get injured on business property all the time. These injuries can result in personal injury claims and lawsuits costing thousands of dollars.

To protect themselves from the high cost of these accident-injuries, owners carry property liability insurance, also referred to as premises liability insurance.

It’s up to each owner to decide how much insurance to buy. The higher the policy limit, the higher the insurance premium. A small business property owner usually carries much lower limits than a chain store like Wal-Mart. If a business doesn’t carry policy limits high enough to cover the cost of a visitor’s injuries, the owner often has to pay the difference.

Some business property owners have no choice when it comes to their policy limits. When an owner borrows money from a bank or other lending institution, the lender will often require the owner to carry liability insurance with limits high enough to cover the loan amount.

Liability for Injuries

While liability insurance does provide business owners protection from accident-injury claims and lawsuits, they are not automatically liable every time a visitor is injured. For the insurance company to accept liability on behalf of its client and compensate an injured visitor, the visitor must first prove the owner’s negligence caused the injuries.

Proving negligence requires showing:

  1. The business property owner knew a dangerous condition existed, or could exist.
  2. The owner had a reasonable amount of time to repair the danger, but failed to do it.
  3. The dangerous condition was the direct and proximate cause of the visitor’s injuries.
  4. The visitor didn’t know the condition existed, or if she did, couldn’t avoid it.
  5. The visitor’s reckless conduct didn’t contribute to the injury
  6. The visitor didn’t agree to assume the risk or indemnify the owner from injuries.

Invitees and Licensees

Business property liability insurance generally covers two classes of visitors:


Invitees are people the business owner, his employees or authorized associates give an express or implied invitation to. An invitee is a visitor allowed on the property to conduct business.

Invitees are customers at a restaurant, hair salon, mall, or other establishment where there’s a legitimate business. Invitees can also be contractors and subcontractors on the property to make repairs. As long as visitors are on the property for business purposes, they are invitees.


Licensees are people who have invitations, or believe they do, onto the business owner’s property, but not for business purposes. Many misinterpret the word licensee because it implies someone has a license of some type. Quite the contrary. Licensees are social guests, friends, children, and others the owner invites for non-business purposes.

Invitees and licensees are legitimately on a business property through two types of invitations:

Express invitations are in the form of personal invitations or through advertising on radio, television, billboards, signs on buses, park benches, and other forms of advertising.

Implied invitations are people who walk in off the street, internet search results, repeat customers, and others who generally know about the business and know they’re welcome to come onto the property for such things as eating, shopping, doctors’ appointments, etc.

Frequently, express and implied invitations overlap.


Trespassers are people who enter a business property without the owner’s (or someone he authorizes) express or implied invitation. Trespassers have no legitimate business or personal reason to be on the property and intentionally enter the property anyway. Once a business owner knows a trespasser is on the property, the he must use reasonable care to get the trespasser off the property.

Although the law varies from state to state, if a business owner knows there’s an inherently dangerous condition on the property and takes no action to get rid of the trespasser, and if the trespasser is injured, the property owner may have to take legal responsibility for the trespasser’s injuries.

Although it’s unlikely a trespasser will win, most property liability insurance policies cover the costs of legal defense for lawsuits trespassers bring and for compensation a court may award them.

Types of Injuries

There are many types of injuries associated with business properties. Among the most common are:

  • Slip and falls on slippery hard surfaces
  • Elevator and escalator injuries
  • Shopping cart injuries
  • Head and neck injuries from falling merchandise or inventory
  • Cuts, abrasions, and lacerations caused by sharp objects like showcases or counters
  • Door injuries like faulty doors that slam on a customer’s face or hands
  • Overcrowding resulting in customers trampling and shoving
  • Parking lot injuries from ice, snow, rain, oil, and other slippery substances
  • Assaults in parking lots and other areas
  • Poisoning from food or drink
  • Puncture wounds from pins, sharp objects, shopping carts, etc.

Filing an Injury Claim

Filing an injury claim against a business owner’s liability insurance requires some forethought. Rushing into a claim can backfire. If you’re planning to file a personal injury claim against a business, you must follow certain steps. Let’s take look at the most important ones.

  1. For an injury on a business property, call for help. Ask for the owner or a manager. If it’s a serious injury, call 911.
  2. Ask the owner or manager to write a report, often called an incident report. Although he’s not legally obliged to, ask him anyway. Unfortunately, if he does write one, he doesn’t have to give you a copy or even let you see it. If, though, your claim turns into a lawsuit, your attorney can subpoena the report.
  3. Look for witnesses. Ask them whether they would agree to give you their names and contact information. Confirm what they saw, especially if they saw what actually caused your injury. If they agree to help, ask them to write down what they saw and then sign it. It doesn’t have to be notarized or sworn to. Just get their statements in writing.
  4. Using your cell phone, take photos or video of the area where you were injured. Focus on what caused your injury. Photos of water on the floor, merchandise that fell on you, or other dangerous conditions contributing to your injury are very important.
  5. Ask the business owner or manager for the name of his insurance company. He may, but it’s more likely he’ll tell you someone from the company will contact you. That’s fine. Be sure he has your full contact information.
  6. Get medical treatment as soon as you can. The longer you wait the greater the chance the insurance company will suggest your injuries happened after you were hurt on its insured’s property.
  7. If you haven’t heard from the owner or the insurance company within a week or two after your injury, send a certified letter to the business. In the letter, refer to the date and time of your injury, the condition that caused your injury, and the injuries you sustained. The letter should go on to include a statement, not a threat, reminding them you have medical bills and other expenses directly related to the injury.

    Tell them you need their immediate cooperation. If not, you’ll seek legal advice. Avoid statements like “I’ll sue you,” or “I’ll have my lawyer sue you,” or “You’ll be sorry.” Statements like these are counterproductive and only make you look foolish.

  8. Once the insurance company’s representative contacts you, she’ll ask you to give a recorded statement. There are those who say you shouldn’t, but if you’re telling the truth there’s really no reason not to, just make sure you don’t blame yourself or admit guilt. Refusing to give a recorded statement can slow down processing your claim. If your injuries are serious, see an attorney before giving a statement.
  9. Be sure to send the claims adjuster copies of the photographs, witness statements, medical bills, prescription receipts, and any other evidence. If you had to miss work, send a letter signed by your supervisor on company letterhead, verifying the dates and times you couldn’t work and the amount of wages you lost.
  10. The insurance adjuster should work with you. Ask her for the claim number. She’ll tell you to continue sending her copies of your medical and/or chiropractic bills, prescription receipts, gas receipts, and any other legitimate evidence of your costs.
  11. Once you fully heal, you can begin settlement negotiations. If you have an attorney, she’ll do it for you. Depending on your injuries, you should consider asking anywhere from two to five times (or higher) the amount of your medical bills. Most soft tissue injury claims settle for anywhere from 1.5 – 3x the amount of medical bills. Hard injuries can settle much higher.
  12. Don’t settle your claim until you fully heal. There’s no rush. As long as you settle your claim or file a lawsuit within your states’ statute of limitations period, you’ll be fine.Go here to check the limitations period in your state.

Hiring an attorney

You generally won’t need an attorney for soft tissue injuries like cuts, bruises, abrasions, contusions, sprained muscles, minor burns, and other minor injuries. If your injuries are the more severe hard injuries like broken bones, severe burns, head injuries, deep wounds, scarring, and similar injuries, see an attorney.

Attorneys have the power to engage in legal tactics you can’t. They can take depositions (recorded statements), have subpoenas issued, send interrogatories (written questions) and requests for production (the other side has to share all its info), and conduct other pretrial activities that substantially increase the odds of success and of a higher settlement.

Most attorneys won’t charge for an initial office visit. If you decide to hire an attorney, you won’t have to pay any fees until and unless she wins your case. Then, her fee will be 30 or up to 40 percent of the gross settlement. In hard injury cases, it’s usually well worth it.

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Visitor Questions on Business Liability Claims