When thinking about the type of insurance your small business needs, it’s important to understand the most common small business insurance claims. What’s even more important is learning how to prevent them. Even with insurance, it’s still time consuming to deal with business damage or lawsuits. Overall, there are five types of claims that happen the most often. While you hope they never happen to your business, it’s always better to be prepared.
1. Burglary
Burglaries account for 20% of all small business insurance claims. It’s disheartening to drive up to your business and see a busted window or broken lock. It’s even worse seeing the damage inside and missing products and money. A few things you can do to prevent this costly type of claim include:
- Installing a security system
- Using remote monitoring during off-hours
- Use pull-down metal screens over doors and windows after closing
- Keep the area well-lit at all hours
While there isn’t a fool-proof way to prevent theft, taking precautions does reduce the risk.
2. Equipment Failure
All it takes is one piece of vital equipment to render your small business helpless. Whether it’s an equipment malfunction, normal wear and tear or vandalism, your business can’t afford to be without the equipment it needs. These small business claims are usually preventable by doing regular maintenance on the equipment. Ensuring the equipment is stored and used properly helps it last longer and keeps your business up and running.
3. Environmental Damage
Natural disasters are one of the worst things that can happen to a small business. After all, it’s difficult to safeguard your business from a tornado or flash flooding. In 2016, insured losses due to natural disasters topped $23.8 billion and that’s just in the United States. Severe thunderstorms and floods caused the most damage, with winter storms and wildfires coming in a close second.
A few things you can do to help at least reduce damage include:
- Using strong surge protectors to prevent electrical damage during thunderstorms
- Storing equipment higher if you’re in flood prone areas
- Move out as much equipment, furniture and files as possible if your business is threatened by wildfires in the area
Natural disasters aren’t exactly predictable. They’re also a strong reason to always make sure you have small business insurance that covers you fully in the case of the unpredictable.
4. Property Damage
Both accidental and malicious property damage are common small business insurance claims. For instance, an irate customer could come back after hours and break windows or spray graffiti on the front of your store. Of course, an employee could just as easily back a forklift into a wall, causing structural damage. You honestly never know what might happen. You may not always have control, especially when it comes to malicious damage, but a few prevention methods include:
- Actively maintaining the property
- Placing clear warning signs in dangerous areas
- Ensuring all employees are properly trained
Having security cameras in place with signs that state the premises is being monitored may also prevent some malicious incidents.
5. Liability
The final most common small business insurance claim is liability claims. These can also be some of the most costly claims and without insurance, they could cripple or destroy all you’ve worked hard for. All it takes is wet spot in the floor to cause a customer to fall and suddenly you’re left paying thousands in medical bills. An employee could trip over an extension cord that wasn’t tucked out of the way and get seriously injured.
The truth is, you never know what might happen or when. eHealthInsurance provides a detailed list of ways to prevent common liability claims, such as:
- Ensuring walkways are clear
- Providing bright lighting
- Cleaning up messes immediately
- Securing stairs, such as adding handrails and non-slip components
- Ensuring any carpeting or rugs aren’t rolling up
Working to make sure your business is a safer place to work and shop helps prevent time consuming claims and allows you to focus on growing your business.
While you hope to never have to use your small business insurance, it’s always best to be prepared. Take precautions whenever possible, but if the worst does happen, you’ll be covered.
Ready to protect your small Colorado business? Contact us today with questions you might have at our Castle Rock office at 303–688-1251 or our Denver office at 303–388-7216. You can also send us a message and we’ll get back to you quickly.