Top 10 Insurance Claims for Small Businesses

As an insurance agency that serves the business community, we often think and talk about the many risks businesses face (often may actually be a bit understated). We’re not trying to be the “Debbie Downers” in the exciting world of business ownership, we’re just super passionate about ensuring business owners properly protect what they’ve worked so hard to build! We think about this daily, so other business owners won’t have to.

If you’re a business owner consider this:

According to a study by the Small Business Administration (SBA), up to 53% of small business owners will have to face a lawsuit. The reasons more than half of these businesses face litigation can vary greatly, so we’re going to narrow it down to the ten most common causes.

The Hartford has ranked the Top 10 Insurance Claims for Small Business, from most to least expensive, based on average national cost. The amounts listed do not include any costs associated with a lawsuit.  More importantly, though, we’ll provide you with Insurance Solutions that would best respond to specific types of claims.

Let’s get into it!

1. Reputational Harm 

The way your business represents itself and others can put you at risk for a reputational harm claim. This includes claims of libel, slander, or false advertisement. Libel and slander are both forms of defamation, which is the act of presenting a false statement as fact. The difference between the two is, libel involves written fallacies, and slander is verbal. For example, if you make a social media post stating your competitor doesn’t provide the services they claim to provide, or you talk about it on a podcast, you could be faced with a defamation claim. False advertising can occur if you use a copywrite, trademark, or other intellectual property owned by someone else in your advertisement. The average cost of a reputational harm claim is $50,000.

Roundtable’s Insurance Solution: Commercial General Liability Policy

 

2. Vehicle Accident Claim

This type of claim is one of the most familiar to people. If a vehicle your company owns is involved in an accident, there can be a claim for bodily injury or physical damage to another person and their vehicle, or damages to your vehicle. If your business delivers goods for others, claims of damage or loss of that freight are also included in this category. The average cost of vehicle accident claims for business owners is $45,000.

Roundtable’s Insurance Solution: Commercial Auto Insurance

 

3. Fire Damage Claim

A fire damage claim would be for damages, or loss, to your building and business personal property due to a fire. For small business owners, the average cost of these claims is $35,000.

Roundtable’s Insurance Solution: Commercial Property Policy

 

4. Product Liability Claim

These types of claims would occur if someone alleges that a product you made or sold caused them bodily injury or damaged their property. The average cost of these claims is about $35,000.

Roundtable’s Insurance Solution: Commercial General Liability Insurance

 

5. Customer Injury Claim

You may be thinking of “slips and falls” here, but that’s just one type of injury a customer can sustain and file a claim for. (Slip and Fall made this “Top 10” list as its own category!) Besides those, accidents involving equipment, chemical spills, or an employee or visitor injuring another customer, all fall under this category. On average, these claims cost $30,000.

Roundtable’s Insurance Solution: Commercial General Liability Insurance

 

6. Wind and Hail Damage Claim 

When storms hit your area, the hail and wind can cause significant damage to your property. If so, you’d have to file a claim. The average cost of these claims is $26,000.

Roundtable’s Insurance Solution: Commercial Property Policy

 

7. Customer Slip and Fall Claim 

This type of customer injury is very prevalent, it’s Top 5 for Most Common Claims, and can cost about $20,000 per claim.

Roundtable’s Insurance Solution: Commercial General Liability Insurance

 

8. Water and Freezing Damage Claim 

Excluding Floods, which are caused by nature, water damage can not only damage your property, but it can leave you without the ability to operate your business. Problems like your pipes freezing, or roof damage due to heavy snow or rain downpours, can cause the same issues for you. The average cost of these claims is $17,0000.

Roundtable’s Insurance Solution: Commercial Property Insurance

 

9. Struck by Object Claim 

These claims account for any other objects that may strike your business or customers. They cost, on average, $10,000 and occur less frequently than others.

Roundtable’s Insurance Solution: Commercial Property Insurance or Commercial General Liability Insurance

10. Burglary and Theft Claim

Rounding out our list of Top 10 Claims for small businesses is Burglary and Theft. While this is the least expensive claim we’ve discussed, with an average cost of $8,000, it is the most common claim. 20% of small businesses will face this type of claim at some point.

Roundtable’s Insurance Solution: Commercial Property Policy

So that’s the list! Have you been faced with any of these claims against your business? Are you concerned that you may lack the insurance required to handle one of these?

If so, give us a call so we can talk about it. We’ll provide you with the best insurance solution to address those concerns!