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The Most Common Business Insurance Claims

Your company more than likely has business insurance to survive certain unexpected challenges. Without the right insurance, a theft or fire can cause devastating losses while a personal injury lawsuit can leave you struggling just to pay the legal fees.

Despite these facts, many small business owners don’t take the time to evaluate their needs and get the appropriate coverage in place. As well, we often think of commercial insurance claims as coming from disastrous, unusual events. But the reality is that small business insurance claims are a common part of doing business.

Which claims are the most common? And what insurance coverages can help protect your small business?

Burglary and theft. Burglary and theft claims include internal theft by employees as well as break-ins. In fact, 42% of inventory loss in stores is caused by employee theft.

Water-related damage. Damage from water to businesses can come from snow, flooding, freezing temperatures and burst pipes.

Wind and hail damage. When strong winds and hail damage commercial property, it can be detrimental for not just the business but the property owner as well.

Fire damage. According to the Insurance Information Institute, a structure fire occurs every 64 seconds in North America. In 2018, structure fires not related to wildfire caused $11.1 billion in property damage.

Customer slips and falls. Slip and falls are a common cause of injuries sustained by customers of small businesses.

In addition to the most frequent claims, these claims were determined to be the costliest – listed in descending order based on severity. The dollar amounts reflect the average claim size.

  • Reputational harm: $50,000
  • Vehicular accident: $45,000
  • Product liability: $35,000
  • Customer injury or damage: $30,000
  • Wind and hail damage: $26,000
  • Customer slips and falls: $20,000
  • Water and freezing damage: $17,000
  • Struck by an object: $10,000
  • Burglary and theft: $8,000

Here are the key takeaways regarding business claims and their severity:

  • About 40% of small business owners will sustain a loss within the next 10 years.
  • Claims vary in frequency and severity. Burglary and theft claims have a high frequency and low severity. The reverse is true for reputational damage claims.
  • Claims occur more frequently than many business owners realize.
  • Many claims can be prevented through proper risk management.

DPM Insurance Group sources coverage for businesses of all sizes across all industries. Contact one of our brokers or CSRs if you would like to discuss your business insurance needs and customize a policy that’s right for you: https://dpmins.com/locations/

 

Source: Encharter

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