It’s easy to think it won’t happen to you. But accidents and unexpected surprises happen every day to businesses just like yours.
“An unexpected event happens more often than many small business owners realize,” said senior vice president of Small Commercial insurance at The Hartford, Stephanie Bush.
After analyzing five years of data from one million policies, The Hartford identified the most common claims your business is most likely to face.
5 Most Common Small Business Insurance Claims
- Burglary and Theft
- Water and Freezing Damage
- Wind and Hail Damage
- Customer Slip and Fall
Every day a business owner finds herself facing the aftermath of a fire, break-in, or other sorts of damage. And if that day should happen to you, here’s what you’ll need to cover your assets.
Commercial Property Coverage
Whether you rent or own your business establishment, the cost of burglary and theft or water/ weather/ fire-related damage can add up fast.
Commercial property policies insure against damage to buildings and their contents due to a covered loss, such as:
- Windstorms or hail
- Smoke damage
What is property, anyway?
Property is any item of value.
Real property can include the building your business operates out of, things attached to the building like outdoor fixtures, permanently installed machinery and equipment, and even the plumbing, lighting, and air conditioning equipment.
Personal property refers to the contents of your building and can include your merchandise and inventory, furnishings, fixtures, and anything else owned by you and used by your business.
Even if you don’t own the building itself, commercial property insurance can help protect your investment in merchandise, furnishings, and other personal property items that your business has purchased.
General Liability Coverage
General liability insurance covers third-party injuries such as a customer slip and fall. It also covers third-party property damage.
The average cost of a claim for customer injury or damage is $30,000. That’s a big chunk of change to pay out of pocket if someone gets hurt at your business.
General liability has you covered for a number of third-party incidents, including:
- A party-goer burns their hand on the warming dish provided by your catering company.
- A neighbor trips over the cord for your power tool.
- A customer slips and falls on your coffee shop’s freshly mopped floors.
- Your employee leaves the water running at someone’s home, flooding your client’s basement.
- Your delivery guy accidentally runs over someone’s brand-new landscaping.
Things can get costly if your business is responsible for third-party injury or property damage. We live in a very litigious society, so there’s a very good chance that a customer could sue you if they’re hurt on your premises or as a result of your business.
Commercial general liability policies generally cover the costs of your legal defense, like lawyers’ fees, court costs, and even resulting damages - up to the limits of your policy.
Standard general liability coverage usually includes:
- Bodily injury and property damage: protection against losses from liability for bodily injury or property damage to third-parties (not your employees).
- Personal and advertising injury: protection against certain offenses, including libel, slander, false arrest, copyright infringement, or use of another’s advertising ideas.
5 Insurance Policies Your Business Needs To Survive
These business insurance policies will protect you against the most common claims and accidents. Find out how to best defend your hard earned assets.
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General Liability + Commercial Property: BOP Insurance
A Business Owner’s Policy (BOP) is an insurance policy that combines protection from all the major commercial property and general liability risks into one package. Think of it as insurance against the claims your business is most likely to face.
BOP policies typically include:
- Property insurance for buildings and the personal property your business owns.
- Liability insurance if your business is responsible for third-party injury, property damage, or personal/ advertising injuries.
- Business interruption insurance to cover the loss of income following a fire or other covered event.
The biggest benefit of using a BOP policy as insurance for your business is the cost-saving element. When all of these coverages are wrapped up into one combined policy, it typically costs less than purchasing them separately.
A BOP may not provide all of the insurance protection that your business needs – it won’t cover your employees, your automobiles, or professional errors/ omissions – but it can cover you against the most common small business insurance claims. If you have a small- to midsize business in a low-risk industry, a BOP could be an affordable solution for you.
If you’ve got a commercial property, general liability, or a BOP in place, it’s easy to recover from an unexpected event. Simply call your insurance professional and let them get to work on your claim. The aftermath may be a bit messy, but at least you won’t be left paying the full price out of your own hard-earned cash reserves.