September 4, 2019.
COMMON BUSINESS INSURANCE CLAIMS
Four out of 10 small businesses are likely to experience a property or general liability claim in the next 10 years, according to an analysis of The Hartford’s small business claims. Topping the list for the most common claim is burglary and theft; however, the most costly claim for a small business is reputational harm, which includes libel, slander, and violation of privacy.
“An unexpected event happens more often than many small business owners realize,” said Stephanie Bush, senior vice president of Small Commercial insurance at The Hartford.
The company identified the most common claims as well the most costly on average after analyzing five years of data from more than one million property and liability policies.
Burglary and theft affected 20 percent of small business owners in the past five years. However, burglary and theft ranked lowest out of the top 10 most costly claims, averaging $8,000, compared to reputational harm claims, which cost $50,000 on average.
MOST COSTLY CLAIMS
A claim payout on a reputational harm claim, covered through a general liability policy, can run much higher if a lawsuit is involved, according to the insurer. If a lawsuit is involved, a general liability claim can average more than $75,000 per case to defend and settle. Based on The Hartford’s claims history, 35 percent of all general liability claims result in a lawsuit.
FIRE CLAIMS are ranked in the top five of both the most common and costly claims. The average cost for a fire claim is $35,000, impacting 10 percent of small business owners in the past five years.
The top 10 costliest small business claims are: reputational harm, ($50,000); vehicle accidents ($45,000); fire ($35,000); product liability ($35,000); customer injury or damage ($30,000); wind and hail damage ($26,000); customer slip and fall ($20,000); water and freezing damage ($17,000); struck by object ($10,000) and burglary and theft ($8,000).
Top 10 PROPERTY AND LIABILITY CLAIMS
|Most Common||Most Costly|
|Burglary & Theft (20%)||Reputational Harm ($50,000)|
|Water and Freezing Damage (15%)||Vehicle Accident 3 ($45,000)|
|Wind and Hail Damage 6 (15%)||Fire($35,000)|
|Fire (10%)||Product Liability 4 ($35,000)|
|Customer Slip and Fall(10%)||Customer Injury or Damage 5 ($30,000)|
|Customer Injury and Damage(Less than 5%)||Wind and Hail Damage($26,000)|
|Product Liability(Less than 5 percent)||Customer Slip and Fall ($20,000)|
|Struck by Object (Less than 5 percent)||Water and Freezing Damage ($17,000)|
|Reputational Harm (Less than 5 percent)||Struck by Object ($10,000)|
|Vehicle Accident (Less than 5 percent)||Burglary and Theft ($8,000)|
Source: The Hartford
COVERAGE FOR YOUR BUSINESS
Making sure your business has the insurance coverage necessary for the specific areas of work that you will be dealing with
has a vital part of becoming a successful business. It only takes one bad lawsuit to make it all crumble to the ground. Having the best insurance coverage possible will help lessen that blow.
At Prime Insurance Market, we understand that, and our mission is to help small businesses like you grow and build a strong and growing business without breaking the bank on insurance.
Request more information about Small Business Insurance https://www.primeinsurancemarket.com/insurance/