5 Examples of Common Business Insurance Claims

5 Examples of Business Insurance Claims

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As a proud business owner, you have a lot on your plate. But nothing as important as minimizing your liabilities. When you think about business insurance claims, you may imagine a customer getting hurt at your store. Or maybe you fear a fire destroying your warehouse full of inventory.

Unfortunately, however, there are countless ways disaster can find its way into your day-to-day operations, which makes recognizing these risks early so crucial to your mitigation efforts.

In this article, you’ll read examples of the top five business insurance claims and the coverages that best address these risks.

1. Theft

Incidents of theft and burglary may have you imagining someone walking into a store and pocketing items. But in reality, employees commit nearly half of these incidents. Therefore, inventory shrinkage due to a staff member misappropriating supplies or embezzling are serious issues that require stringent mitigation efforts.

Deterrents are crucial and should include high-end security systems, fencing, and strict access and auditing protocols. However, these incidents aren’t entirely avoidable, and commercial property insurance can ensure your losses are compensated.

2. Water Damage

Water can cause extensive damage to your business property in a matter of minutes. However, it doesn’t take a hurricane rack up massive repair costs. In addition, freezing temperatures and poorly insulated water lines can lead to bursting, snow melt on a compromised roof creates ceiling leaks and mold, and sewage line defects in your structure can make a terrible mess.

There are several common-sense steps you can take now to reduce your risk of water damage:

  • Remove ice and snow on your roofs and stoops
  • Know where the various water shut-offs are in your building
  • Regularly check seals on water lines, sink and toilet drains, and outside faucets
  • Maintain a building temperature of at least 55 degrees Fahrenheit during the winter months

Commercial property insurance may help cover the costs of incidents you couldn’t avoid, such as burst pipes and rain leaks. However, flooding from severe weather like a hurricane or river floods is not. Fortunately, you can also purchase a business interruption insurance policy. This policy will reimburse you for income you may lose while your business is closed to repair damage.

3. Business Insurance Claims from Wind and Hail

The sheer force of gale-strength winds and the destructive effects of hail can cause a lot of damage to your commercial property. When storms roll through, trees are blown down, outdoor furniture gets broken, canopies get torn away, and windows get cracked and broken.

These damages can extend to your employees and guests should they be on site when inclement weather strikes. For example, imagine how your client would feel if, during a law consult at your practice, a maple comes crashing down on their car in your parking lot?

Much of this damage could be covered by a comprehensive business owner’s policy (BOP) with general liability, business interruption, and commercial property coverages. However, there are steps you can take to minimize the effects of these weather events, including:

  • Maintaining your grounds, including the health and stability of your trees
  • Secure outdoor furniture as much as possible
  • Use rollaway canopies to keep them secure during windy weather
  • Consider shutters for your windows

4. Business Insurance Claims from Fire and Smoke

Fires that start in your establishment could quickly spread to neighboring businesses, creating a financial catastrophe that could haunt you financially for years to come. While it’s also possible that your business suffers smoke or fire damage under similar circumstances, there are preventative measures you should prioritize to minimize your liability.

  • Regularly have your fire extinguishers inspected and maintained
  • Ensure all employees know how to use extinguishers
  • Have a fire suppression or sprinkler system installed
  • Ensure all electrical equipment is in good repair
  • Create an emergency exit plan and drill employees regularly

In situations where you can’t stop a fire incident, having a business owner’s policy that includes commercial property and business interruption insurance will be crucial to rebuilding.


5. Customer Slips, Trips, and Falls

If you operate a retail business, such as a restaurant or game store, the chances of a customer getting injured on your premises are high. Slips, trips, and falls can happen from cluttered aisleways. They can also happen when electrical cords are not safely tucked away, or flooring and stairs are in disrepair. The types of injuries one can suffer from taking a spill could include:

  • Fractures and broken bones
  • Head injuries
  • Traumatic brain injuries
  • Torn, sprained, and strained muscles and tendons
  • Broken teeth
  • Paralysis
  • Death
  • Emotional trauma

While many claims of this nature are genuine, some individuals may be looking for potentially dangerous conditions to create a fraudulent claim. Using security cameras in key areas that pose the most risk can act as a deterrent and prove your defense in such instances.

Consider getting a general liability insurance quote since this coverage is usually the primary insurance option for third-party injury claims of this nature. You can easily calculate and understand your insurance costs by looking online. Costs will vary based on a variety of criteria such as the state in which you operate, the industry, the number of employees you have, and so on.