According to a study conducted by The Hartford, more than 40 percent of small businesses will need to file an insurance claim in the next 10 years. This study covered the types of insurance claims most often filed by small businesses.
The study analyzed over a million policies purchased by small business owners over a period of five years. These pertained to liability claims, car accident claims and property claims. Although the percentage of filing an insurance claim in the next 10 years by small business owners may come as a surprise to them, the fact is that unexpected events occur more frequently than they would like to think.
So, small business owners should be on the lookout for the following workplace hazards:
#1 Burglary and theft
No business is immune to burglary and theft, especially businesses involved in retail, construction and manufacturing. It is incumbent on such business owners to cover themselves against losses not only due to thefts, but also against damage to company property due to break-ins. A commercial property insurance policy covers such losses.
One of the worst enemies of business is damage and destruction caused by fire. Filing commercial property insurance not only covers financial losses due to fire, but also covers losses due to damaged buildings, equipment and supplies. Furthermore, a business income insurance also enables business owners to cover their monetary losses resulting from suspended business operations due to fire.
#3 Workplace accidents
Workplace accidents happen with regularity and no business is insulated against them. Accidents, such as a worker getting hit by a piece of equipment, are more prevalent in industries dealing in construction, manufacturing, agriculture and forestry. Struck by an object insurance covers such accidents. Other types of accidents resulting in workers’ injuries get covered under workers compensation insurance.
#4 Auto accident
Commercial vehicles are always at a risk of getting involved in accidents. A commercial auto insurance policy not only protects against claims due to vehicle damage, property damage and injury, but also against the liabilities of business, commercial vehicles and vehicle operators.
#5 Customer injury in business premises
The possibility of customers sustaining personal injuries due to slips and falls, etc., in the business premises is always there. In such an event, it is the business owner who is liable for their medical expenses, legal fees, and lost wages. Such financial losses get covered under a general liability insurance policy. This also covers the damage to business property.
#6 Injury through faulty product
If a customer sustains injury due to a faulty product of a small business, the business owner may be held liable for the resulting injuries or illness. Such incidences are commonly encountered in industries, such as retail, manufacturing, and distribution. Going in for general liability insurance and product liability insurance policies help cover such risks.
#7 Damage due to water
Damage due to burst pipes, flooding, etc., are more common in coastal regions and low-lying areas that are prone to flooding. Water can cause structural damage, destroy floor carpeting and even encourage mold infestation. A commercial property insurance covers damage due to water.
#8 Damage due to natural calamities
There are certain natural calamities that cannot be anticipated or prevented, like cyclones, tornadoes, hailstorms, high winds, snowstorms, earthquakes, and the like. Such hazards not only inflict damage on commercial buildings, but can also totally wipe out businesses. In fact, damage due to wind and hail is the third most common occurrence faced by small businesses. A commercial insurance policy covers the damage caused by such calamities.
#9 Harm to reputation
Although this is not a physical hazard, this form is as damaging. This happens when a small business either causes an individual or another business to lose face by its actions or the business itself earns a negative reputation by some act, such as data breach. More prevalent in media organizations and companies that store customer data, this form of damage can be contained through general liability and professional liability insurance policies.
Since small businesses can be faced with innumerable claims by its workers, customers or other businesses or individuals, it is incumbent on small business owners to cover themselves against such claims by relevant insurance policies to cover all eventualities.