Article by Robert Fiorito & Chris Dunlap, HUB Insurance
Slips and falls are one of the most frequent sources of liability losses for New York City property owners and merchants.
It’s been 14 years since New York City passed laws transitioning a majority of the responsibility to adequately maintain sidewalks to a “responsible party”. With that transition in responsibility, insurance claims and related costs have also effectively been passed onward. Negligence suits and payments have continually escalated, and have resulted in settlements and judgments from the thousands and in some cases, into the millions of dollars. In addition, many personal injury law firms advertise that they’ll only charge if they win, so plaintiffs have nothing to lose. Another common practice is to claim to be unsure of where exactly the plaintiff fell, which means that any deficiency or crack that is found could potentially be used against the defendant (you).
According to the law, failure to maintain such sidewalk in a reasonably safe condition shall include, but not be limited to, the negligent failure to install, construct, reconstruct, repave, repair or replace defective sidewalk flags and the negligent failure to remove snow, ice, dirt or other material from the sidewalk. The city requires that the designated “responsible party” install, reinstall, construct, reconstruct, repave or repair only those sidewalk flags which contain a substantial defect. Within the New York City Code: 19-152 Duties and Obligations of Property Owners with Respect to Sidewalks and Lots, there is a list of 9 common definitions of a “substantial defect”, with which responsible parties should be familiar. Per these definitions, a trip hazard is usually considered to be ½ inch or greater variation.
In most cases, the designated “responsible party” is the property owner; HOWEVER, it has been known that frequently enough, property owners will pass through the responsibility to restaurant owners through risk transfer via the lease agreement. There have been many situations where the restaurant proprietor was not aware that he or she was ultimately responsible to maintain and repair the sidewalk in front of their space until it was too late when a claim and lawsuit was filed against them.
Loss Prevention Best Practices
It is critical to not only have every signed lease not only reviewed by your attorney, but your insurance broker, to ensure that the indemnification, hold harmless, and other insurance provisions are not tilted towards your business when it comes to maintaining and repairing sidewalks.
If your lease is finalized and indeed names you as the responsible party for sidewalk maintenance, it is highly recommended that frequent, documented inspections are conducted to identify any of the above defects and corrective measures completed immediately. This procedure is a critical element of loss prevention and can make a significant impact.
Security cameras covering sidewalks have also become very popular and useful tools, as the price of this equipment continues to decline. Cameras that are recorded and monitored allow restaurant owners to investigate claims when they are reported, and they provide a snapshot of sidewalk conditions at the time of the alleged incident’s occurrence. However, many DVR type systems have limited memory storage, typically 60-90 days maximum, though this is growing. Therefore, it is critical to save footage from any reported incident, to preserve in the event of legal action or insurance claim.
Lastly, many restaurants have cellar access hatches that are located on busy sidewalks. Claims and lawsuits where pedestrians have fallen through open hatches have been in the millions in many cases. This is a serious exposure and restaurants should do their best to schedule deliveries when pedestrian traffic is at a minimum. In addition, adequate signage, and physical barriers should be placed out whenever hatches are being accessed. Some restaurants on busy streets have even gone as far as putting a staff member outside to direct pedestrians and ensure that they avoid the hazard.
We understand that running a successful restaurant is extremely challenging, and often the last thing owners want to think about is insurance. However, failure to protect oneself from sidewalk liability risks (especially in New York City), can have major consequences that result in huge insurance premium increases, thus impacting already compressed margins, and ultimately the viability of your restaurant.
Chris Dunlap, MS, ABCP, ARM-E, CFPS, CLCS, serves as Vice President and Senior Risk Consultant with HUB International’s Risk Services Division. In this role, he coordinates risk management, safety and loss prevention solutions for HUB’s clients. Chris can be reached at 908-790-6883 or by email at email@example.com.