According to an analysis of The Hartford’s small business claims 4 out of 10 small businesses will likely experience a property or general liability claim in the next 10 years. The most likely one being burglary and theft, with the most costly claim for a small business is reputational harm, including libel, slander and violation of privacy.
10) Burglary and Theft – $8,000 – 20% of claims
Having a break-in is never part of the businesses long term plan, but according to Hartford, burglary and robbery account for 20% of small business claims. The law makes a slight differentiation between burglary and robbery:
- Burglary: Unlawful entry into a structure, typically a break-in
- Robbery: Taking or attempting to take something that has value from someone by using intimidation, force or threats, the classic case being a bank robbery
Aside from burglars stealing computers, laptops and other tech they may steal or damage prototypes or important files. In addition there are also the cases of robbery, where the damage happens through intimidation or force.
According to Hartford this accounts for 20% of claims with the average amount adding up to $8,000.
9) Water and Freezing Damage – $17,000 – 15% of claims
Water may be an essential part of life, but in the wrong place at the wrong time it can be a destructive and costly force. If your business has any machinery, appliances, or even a broken sink or toilet it can lead to extensive water damage that can damage the building itself, the pipes and equipment, computers and files.
8) Wind and Hail Damage – $26,000 – 15% of claims
Wind and hail can cause severe property damage to your office building, usually connected to thunderstorms and tornadoes and can cause anything from roof damage to shattered windows. Though typically affecting the Midwest and Great Plains, every state can be affected.
7) Fire Damage – $35,000 – 10% of claims
One of the toughest things that can happen to a business is fire damage. The damage it causes to the building, the smoke damage and the loss of work can cripple a business. Equally tough is after the fire, the ordeal that a business is put through to get their business back together.
6) Customer Slip and Fall – $10,000 – 10% of claims
A slip and fall accident may seem like a cliché, in reality they account for a significant number of injuries to customers and employees every year.
Slip and falls are the most preventable accidents to occur in the workplace. Customers can get hurt but clutter, wet floors, improper cleaning or a lack of hazard identification, yet a small thing like a slippery when wet sign can prevent this.
5) Customer Injury and Damage – $30,000 – less than 5%
An employee may cause a customer serious damage through negligence such as a car accident. Should the business be held liable, they can be charged with having to pay. The law blog Nolo.com looks at the common personal injury claims with the most common being:
- Medical treatment – Cost, reimbursement and compensation of medical treament
- Income – Income lost and money lost in the future
- Property loss – Vehicles, clothing, or other items damaged as a result of the accident
- Pain and suffering – Compensation for pain and serious discomfort suffered during the accident and its immediate aftermath as well as ongoing pain that can be attributed to the accident.
- Emotional distress – Compensation for the psychological impact of an injury including fear, anxiety, and sleep loss.
- Loss of enjoyment – Compensation keeping the plaintiff from enjoying day-to-day pursuits like hobbies, exercise, and other recreational activities
- Loss of consortium – Damage related to the impact the injuries have on the plaintiff’s relationship with their spouse
4) Product Liability – $35,000 – Less Than 5%
Nothing is as bad as working hard to put out a product, only to have a customer get injured using it. Defective or dangerous products are the cause of thousands of injuries every year in the U.S. This includes:
- Defectively Manufactured Products – A product that had an error in making it, such as a problem at the factory where it was made.
- Defectively Designed Products – The product’s design is inherently dangerous or defective.
- Failure to Provide Adequate Warnings or Instructions – Typically involves a product that is dangerous in some way that’s not obvious to the user or that requires the user to exercise special precautions or diligence when using it.
3) Struck by Object – Less Than 5% – $10,000
Struck-by objects is a leading cause of construction-related deaths. According to the Department of Labor approximately 75% of struck-by fatalities involve heavy equipment such as trucks or cranes. This can involve damage from vehicles, falling/flying objects or constructing masonry walls.
2) Reputational Harm – Less Than 5% – $50,000
You can just look at AT&T’s tasteless 9/11 ad or one of the many badly placed ads in magazines that ended up making a brand look like a laughingstock and be attacked in the media. Or if an employee goes “off message” and tweets to the wrong account. Small innocuous things like this these things can really tarnish your brand and have the potential to ruin your company’s hard-fought reputation.
1) Vehicle Accident – Less Than 5% – $45,000
Auto accidents typically happen when you need it the least. And the most careful drivers may be involved, through no fault of their own, though an auto malfunction or thrugh being distracted by a phone call.