According to The Hartford’s report on small business claims, four out of ten small businesses will file a property or general liability claim within the next ten years. This might not surprise you, but the difference between the most common types of claims versus the most expensive claims is overwhelming!
The most common claim filed by a small business relates to burglary and theft. These types of losses affected 20 percent of business owners in the past five years. However, these are also the least expensive types of claims, with average damages amounting to 8,000 dollars.
On the other hand settle.
Generally speaking, the most costly claims (according to the report) involved liability issues, rather than company property. The five most expensive claims were:
- Reputational Harm (average cost $50,000)
- Vehicle Accident (average cost $45,000)
- Fire (average cost $35,000)
- Product Liability (average cost $35,000)
- Customer Injury or Damage ($30,000)
As you can see, fire damage was the only type of claim in the top five that involved strictly company property. Vehicle accidents, of course, involve company vehicles but nearly always involve at least one non-company vehicle. Injuries to non-employees are likely to be included in that figure. The other types of claims in the top five (Reputational Harm, Product Liability, and Customer Injury or Damage) all involves liability issues.
The takeaway lesson for business owners is that emphasis on property-only insurance is not enough to adequately protect your business. Claims relating to property are still the most common, but the most expensive claims tend to relate to liability issues. Often, these cases cannot be settled out of court, and result in expensive court proceedings.
A general liability covers many, but not all, of these issues. Call us to schedule a consultation, and decide whether you should consider additional forms of insurance to protect your small business.