Common insurance claims for small businesses and risk prevention tips

professional services insurance
3 minute read  

Running a small business can be rewarding but often means you’re juggling multiple responsibilities. This often includes identifying potential risks and liabilities associated with your business operations. Knowing some of the common insurance claims businesses make and implementing preventive measures can help save you from potential financial losses and operational disruptions.

Common claims for small businesses

Commercial general liability (CGL) claims

Commercial General Liability (CGL) claims can stem from events that lead to bodily injury or property damage to a third party. For instance, if a customer slips and falls on your premises, or if your employee accidentally damages a client’s property during an offsite job. This is where CGL insurance may be beneficial as it can help cover the medical expenses or repair costs in the event of an accident.

Property damage claims

Property damage claims typically involve damage to a business’s premises or equipment due to events like theft, fire, or vandalism. Commercial property insurance can help in protecting your physical assets, whether you operate out of a storefront, home office, or other commercial space.

Cyber risk and data breach claims

Cyber attacks are a growing concern – especially for small businesses. Claims resulting from a cyber attack are often associated with data breaches, data loss, or system damage. Whether you store sensitive client information or essential business data on your computer, this cyber insurance can be a vital safeguard against escalating cyber threats.

Errors and omissions (E&O) claims

Errors and Omissions (E&O) insurance can help protect businesses from claims of negligence, errors, or omissions in their professional services. For example, if a client alleges that your professional advice or service caused them financial loss, E&O insurance may help mitigate your losses.

Contractor’s equipment claims

If you own or lease mobile equipment for your business, contractors insurance can help protect you against loss or damage due to theft, fire, or vandalism. It may also help cover materials intended for a project before they are installed or while in transit.

Be sure to always review your small business insurance policy with a trained professional to ensure you’re aware of what risks and situations may be covered under your policy.

Risk prevention tips for your small business

Implement safety protocols

Develop and enforce safety protocols to help prevent accidents on your business premises. Regularly train employees on safety practices and ensure that your workplace is free of hazards.

Invest in cybersecurity

Enhance your cybersecurity measures by using strong passwords, encrypted data storage, and advanced security software. Educate your employees about phishing scams and safe online practices to reduce the risk of cyber attacks.

Regular maintenance and inspections

Conduct regular maintenance and inspections of your business premises and equipment. Address any wear and tear immediately to prevent larger issues that could lead to possible damage or injury.

Clear communication with clients

Ensure clear communication with clients regarding the scope of your services. Maintaining detailed contracts and documentation can help prevent misunderstandings or possible contract disputes.

Secure your equipment

Use secure storage and transportation methods for your mobile equipment and materials. Implementing strong security measures can help mitigate losses associated with theft and vandalism.

How small business insurance can help

Helping protect against financial losses

Insurance can help provide a financial safety net in the case of unforeseen events. By potentially covering the costs of repairs, medical expenses, or legal fees, insurance can help your business recover quickly without incurring significant out-of-pocket expenses.

Ensuring business continuity

The right business insurance can help you resume operations swiftly after an incident. If your business is suddenly disrupted by a disaster or loss, business interruption insurance can help cover your loss of business income – allowing you to get back to business with minimal downtime.

Providing peace of mind

Knowing that your business is protected against can give you the ability to focus on growth and innovation. With the right insurance coverage, you can operate confidently, knowing that you have a plan in place for potential setbacks.

Meeting legal and contractual requirements

Depending on your industry or business operations you might be required to have insurance, legally or through contractual agreements. Ensuring you have the necessary coverage can help you comply with potential regulations and secure business contracts.

Ensure that you’re protected

Despite your best efforts, sometimes the unforeseen can happen. That’s why having the right small business insurance can be helpful. To learn more about how a tailored policy can help protect you, your employees, and your bottom line, visit our business insurance page.

This blog is provided for information only and is not a substitute for professional advice. We make no representations or warranties regarding the accuracy or completeness of the information and will not be responsible for any loss arising out of reliance on the information. Terms, conditions and exclusions apply to coverage. See policy for details.