The Cost of Doing Business

April 5, 2010

A local locksmith was working on a door lock at a large mall recently when he was stopped by mall security officers. The officers stated that the locksmith must include the mall as an additionally insured company on his business liability insurance policy before any locksmith work could be done. Since the locksmith had not included this building by name on his liability insurance policy, he was forced to leave the building without finishing the job.

This same locksmith told Locksmith Ledger that several real estate companies with rental properties had also recently requested the same co-insurance condition before they would allow locksmith work to be done at their building sites.

To make sure of the facts, I contacted Anita Bishop of Allstate Insurance Company. She stated that it is a common practice today for companies to request liability insurance inclusion as a requirement before any kind of work can be undertaken at their premises. Ms. Bishop also stated that building owners are trying to protect themselves against lawsuits such as people who may slip and fall on workmans’ tools or other equipment often found at a work site. For those insured with Allstate, there is an approximate $50 cost for each additional insured company added to your policy. Costs may vary depending on your individual insurer.

Having the proper amount of liability insurance is important. One of our writers was involved in a lawsuit a few months ago as an expert witness. The case involved a person who was apparently injured as a result of being held in between the door and jamb by an automatic door closer. The lawsuit involved the manufacturer, the distributor and the installer. The saying goes that “anybody with deep pockets” is certain to be included when a person believes that they have been wrongfully injured.

Ten years ago Aaron Fish wrote about a liability issue his company was involved in. One point in his essay was that damage compensations today seem “astronomically high.” The second important point in his essay was a recommendation that locksmiths should always try to sell high quality products, and to purchase those products from dependable, known distributors.

You never know if or when some litigation problem may arise. But with proper insurance and good planning in what you sell and who you purchase those products from, your company will be in the best position to defend itself.