business owner reviewing insurance claim

Common Small Business Insurance Claims, Prevention, and Coverage

3 minute read

There comes a time when businesses have to file an insurance claim. There are a variety of reasons why a claim may be needed. Sometimes they’re the responsible party, other times they’re not. Here are some of the most common small business insurance claims, tips on prevention, and the type of insurance that may provide coverage for the claim.

Automobile Accident

A business owner calling his insurance after theft-Business Insurance Claims

Scenario 1: Your plumbing assistant is driving to The Home Depot. On the way, his truck is hit by an uninsured driver. Thankfully, everyone is OK, but the truck is damaged.

Scenario 2: You’re about to go to a job site and discover that your work van had its windows shattered.

Related Business Insurance Coverage: Business Auto Insurance

Prevention Tips: Ensure all drivers are well-rested and have good driving records and keep vehicles in safe areas while parked.


Burglary and Theft

Man breaking into a business- Business Insurance Claims

Scenario 1: Your office or place of business is broken into and you discover missing equipment or products.

Scenario 2: Your work van is vandalized and your tools are stolen.

Related Business Insurance Coverages: Commercial Property Insurance (may cover items stolen from office or place of business), Inland Marine Insurance (may cover items taken from your work vehicle or job site)

Prevention Tips: Always consider various forms of security–appropriate and professional-grade locks, adequate lighting, and security cameras (even budget-friendly options help).


Customer Injury On-Premises

Nursery owner watering plants- Business Insurance Claims

Scenario 1: You own a nursery. While watering the plants, one of your employees puts down the hose to grab something from the shed. Meanwhile, a customer doesn’t notice the hose on the ground, trips over it, and breaks his ankle.

Scenario 2: You own a mini-mart. A shopper tries reaching for a jar at the back of the shelf and accidentally catches her fingers on a sharp edge. She’s injured and had to get stitches.

Related Business Insurance Coverage: General Liability Insurance

Prevention Tips: Always ensure a safe environment for you, employees and customers. If you know of potential dangers, close off the areas or display clear warnings.


Discrimination or Wrongful Termination

Man terminated from work sitting on steps-Business Insurance Claims

Scenario 1: One of your employees sues you, alleging you’ve failed to promote them due to their lifestyle outside of work.

Scenario 2: An employee claims that they were wrongfully let go despite being a top producer.

Related Business Insurance Coverage: Employment Practice Liability Insurance (EPLI)

Prevention Tips: Make sure all of your business practices are ethical and transparent. Have employer-employee contracts that a lawyer has vetted.


Employee Injury

Employee injured her ankle-Business Insurance Claims

Scenario 1: An employee at your warehouse is momentarily distracted while operating the forklift. He accidentally trips over a heavy box that hits another employee on the shoulder, causing an injury.

Scenario 2: Your assistant is driving to pick up lunch for the team and gets injured in an accident.

Related Business Insurance Coverage: Workers Compensation Insurance

Prevention Tips: Make sure employees are well qualified for their role, have safe and suitable work environments, provide all necessary personal protection equipment (PPE).


Fire Damage

Toaster catching on fire in the breakroom-Business Insurance Claims

Scenario 1: You lease a space for your business. The toaster oven in the breakroom is left on overnight and starts a small fire that luckily extinguishes before causing more serious damage.

Scenario 2: You own an 8-unit building downtown that you lease out to businesses for office space. A nearby protest attracts some vandals who then Molotov cocktails and your building suffers a fire.

Related Business Insurance Coverage: General Liability Insurance (scenario 1), Commercial Property Insurance (scenario 2).

Prevention Tips: Take extra precautions, keep your space free of clutter, have fire extinguishers accessible and check them regularly, have smoke detectors and check them regularly.


Property Damage (not as a result of faulty workmanship)

Man cleaning carpet-Business Insurance Claims

Scenario 1: You’re a carpet cleaner and accidentally bump into the customer’s living room wall, resulting in a very obvious hole in the drywall.

Scenario 2: You’re a roofer and just arrived at the job site. While you back in your truck onto the driveway, you accidentally hit and damage the homeowner’s garage door.

Related Business Insurance Coverage: General Liability Insurance

Prevention Tips: Be aware and precautions while you’re at a customer’s home or job site. Ask for help when needed, even if it’s just an extra set of eyes.


Water-related Damage

Water damaged ceiling in office-Business Insurance Claims

Scenario 1: You and your employees are off work and leave the shop for the weekend. When you return, you notice the office carpet is soaked and the commercial printer is damaged from water steadily falling from the ceiling. It turns out a water pipe in the breakroom upstairs broke.

Scenario 2: Next month, there’s a foul stench coming from the hall. You check it out and see that the toilet has been overflowing and ruined the carpet.

Related Business Insurance Coverage: General Liability Insurance within a Business Owners Policy (BOP)

Prevention Tips: Make sure your place of business is up to date on building codes and general maintenance.


This content is offered for educational purposes only and does not represent contractual agreements. The definitions, terms, and coverage in a given policy may be different from those suggested here and such policy will be governed by the language contained therein. No warranty or appropriateness for a specific purpose is expressed or implied.