When you first open a business, you think only of the visible problems that may arise. Will there be enough inventory to keep up with demand? Did you order the right kind of computer equipment for your employees? These are the types of things that plague a new business owner’s brain. However, what you aren’t thinking about are the common insurance claims that might crop up and weigh you down in the future. You didn’t open your company believing that you would have any of these types of things come up and plague you. Check out the top five business insurance claims filed and get an idea on how to prevent them from happening to you.
1. Theft and Burglary – The Most Common Insurance Claims
When looking at the top claims insurance companies deal with every year, theft and burglary easily come in first. Many business owners may not understand how easy it is for someone to lift something out of an office, store or warehouse, but it is. Most of the time, insurance claims only get filed when bigger-ticket items get snatched. The average amount of a claim such as this is $8,000.
2. Hail and Wind Repairs
Mother Nature can cause some wild weather happenings, even in places that aren’t always used to it. Hail the size of softballs can rain down at any given time and wreak havoc on your roof and fleet. Winds can come out of nowhere and tear down signs and awnings. The repairs needed after one of these two events makes up for the second most common business insurance claims filed per year. These claims cost more money on average, though – approximately $26,000 per year.
3. Freezing Pipes
When you pack up for the weekend or a winter holiday, you may not even think twice about what will happen to the shop while you’re gone. However, you may return to work and find a huge and financially devastating mess. When water freezes, the pipes expand to the point of bursting. When this happens, it can cause some financial damage. Water intrusion through the plumbing system is a costly repair, averaging about $17,000 per claim. Thus, it is one of the common insurance claims filed by businesses annually.
4. Customer Injuries
Customers and clients walk about your company daily. If you own a business that deals in food service or goods, chances are there may be spills that cause a hidden danger to customers. Slip and fall injuries rank fourth on the list of annual insurance claims. When something is present on the ground that causes customers and clients to take a tumble, it can be costly for your policy and you personally. Depending on the circumstances surrounding the fall, plaintiff attorneys can tie up your finances for reparations. The average cost of an insurance company to settle a claim for a slip and fall is a staggering $30,000.
5. Libel and Slander Allegations
Take a moment to consider what might happen if you had to pay for damage done to another person’s or business’s reputation? You may not even understand what this would entail, but if you ever get caught up slinging mud with a competitor, you may find yourself the subject of a massive and costly lawsuit. Every year, insurance companies rank reputational harm claims as the most expensive of all payouts, costing roughly $50,000. This means if you are accused of slander or libel, which breaks down to unfounded or inflated words against another, that person or entity may sue you. This is the least common claim filed against businesses; however, with it being the costliest, it more than makes up for its low ranking.
You don’t need to start your company off worrying about what may never happen. However, you should focus on how you can avoid common insurance claims. Avert thefts by installing security equipment or hiring a company. Avoid slip and fall claims by making floor inspections part of an employee’s work duties. Don’t bash others and you’ll avoid inflicting their reputation. Before leaving on a break during the winter months, make sure your water is turned off to prevent freezing pipes. These are just some of the measures you can take to alleviate common insurance claims for your business.Average cost of claims calculated by The Hartford
Photo Source: The Hartford