By: Janine Janse van Vuuren, Executive Head Claims: PI and Liability at SHA
With Black Friday only weeks away, it has been predicted that retailers will once again see record-breaking numbers this year, and sales are projected to surge by as much as 30% on the day. With this influx of customers, retailers are warned that their liability risks will increase exponentially on Black Friday as well.
This is according to Janine Janse van Vuuren, Executive Head Claims: PI and Liability at SHA, who says that personal injury claims against businesses have gone up drastically in recent years. “The possibility that a customer suffers some kind of injury on a retailer’s premises is far more likely during Black Friday (when behaviour such as pushing and shoving is heightened).
“The potential damage to a business’s bottom line is also growing. Our claims data shows that between 2016 and 2018 personal injury claims have grown from an average of R172 600 per claim, to over R270 690. This is in large part due to the fact that the non-financial components of the damages, such as pain and suffering, are becoming progressively larger and are often inflated.”
Even when personal injury claims are spurious or fabricated, the cost of legal defense can be significant for business owners. “The good news for retailers that have adequate liability policies in place, is that their existing insurance already covers incidents that may occur during times of unusually high foot traffic. There is no need to acquire additional cover for the possibility of incidents occurring during peak times if their risks are already sufficiently underwritten with appropriate limits of indemnity.”
However, she notes that retailers have a fair amount of responsibility to manage their own risks as well. “The business must have adequate risk management measures in place in order to avoid any accusations of negligence especially when expecting a rush of people. If something happens and it is found that the business has indeed cut corners with its risk mitigation, the insurer could refuse to pay the claim. It is vital to ensure that all safety requirements for one’s property are met, and that there is extra security in place for the protection of customers.”
On the topic of security, Janse van Vuuren has one last piece of advice. “Employing security staff with the right level of training is incredibly important. The liability risks related to personal injury and wrongful arrests by poorly trained security staff are huge. There have been multiple recent cases where customers had claimed compensation for humiliation and assault following wrongful arrests and/or altercations with security personnel. Living in the age of social media, the ensuing reputational damage can also be incalculable.”
In closing, she states that it is imperative for retailers to consult their brokers before the advent of this year’s Black Friday to ensure that their risk management measures and their insurance cover is up to date. “Black Friday is the perfect opportunity for retailers to bump up their profits for the year in a meaningful way. However, if retailers do not take the time to mitigate their risks they could end up with a net loss,” Janse van Vuuren concludes.