When you took out insurance policies for your small business, you probably assumed that while you appreciate having the protection, the chances are slim that you would have to make any insurance claims.
The truth is, there is in fact a very good chance that at some point you will have to claim damages or losses to your insurance provider, no matter what kind of business you own. Here are some of the most common types of business insurance claims so that you know what to expect, and possibly work to prevent having to make one yourself.
1. Fire Insurance Claims
It might shock you to know how many fire hazards there are in any standard workplace. It could be caused by an electrical issue, a malfunctioning appliance, or someone being careless with their lighter or cigarette.
If you run a restaurant then there is always the risk of a grease fire. If you experience a fire in the workplace, you will have to pay for the cleaning, restoration, and the time that your workplace is closed for safety reasons. This can all cost you money, and you will likely want to make a claim to get compensation for it.
2. Customer and Visitor Injuries
If you have a lot of people who come and go to your workplace, then your chances of having to face a liability lawsuit are high. Customers and visitors can trip and fall, or they could be hurt in an accident.
You may be held liable for the injuries they have suffered, and have to pay for medical costs along with your own legal and administrative costs. This is covered by your general liability coverage, which every business should have.
3. Professional Liability
Nobody’s perfect, and no business goes without making mistakes from time to time. Many businesses end up finding themselves facing a lawsuit because of those mistakes, however.
For example, a handyman may come to repair a door at a restaurant. If that door is not fixed properly, it might not be operational for the next business day, and with cold weather, they are not able to open safely. They may then claim the contractor is liable for their losses.
If the contractor has handyman liability insurance, they will be able to protect their business while also providing compensation to the restaurant.
4. Product Liability
There may come a time when a product that you sell causes injury or damage to a customer or their family. It could be from a defect, or even if you do not provide adequate instructions for use.
You could be held liable for damages, medical bills, lost wages, and legal fees. With product liability coverage you can make an insurance claim to have these costs covered instead of paying out of pocket.
5. Criminal and Theft Claims
Many businesses suffer from criminal actions that result in a loss of cash or other valuables. This can come from employees who steal from the business, or from outsiders who break in or access your valuables fraudulently.
You can work to prevent these types of situations with security measures at your workplace, but you can still be a victim of enterprising criminals.
6. Automobile Accidents
Having vehicles on the road for your business drastically increases the chances that you will have to file an insurance claim. Vehicles are always at risk, and they can cause damage and injury to others.
If you have large vehicles they are more dangerous and can cause more damage than small ones. Your personal automobile coverage will not be adequate. You must have commercial automobile coverage to make sure you are fully protected.
7. Reputational Harm
You may have to file an insurance claim to protect yourself from the costs of being sued for reputational harm. This can happen if you or someone from your business says something negative about an individual or another entity that could harm them in some way.
This coverage can also apply if your own reputation is harmed by a negative event, such as a data breach or a negative statement in the media. Your general liability coverage will protect against costs of being sued, and your professional liability policy can protect you against losses you’ve suffered from reputational harm.
8. Workers’ Compensation
If an employee gets injured or sick while on the job and they have to recover and miss work time, you will have to pay for their medical costs and lost wages. This is a very common occurrence, so you need this insurance to protect everyone involved. In fact, workers’ compensation coverage is mandatory in most states.
As you can see, there are many reasons why a business might have to make an insurance claim. In fact, you may make several claims during the time that you own and run your business.
Accidents and mistakes can happen at any time, and sometimes people will take action against you just because they are angry. You should never leave yourself or your business unprotected.
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I am Adeyemi Adetilewa, a media consultant, entrepreneur, husband, and father. Founder and Editor-In-Chief of Ideas Plus Business Magazine, online business resources for entrepreneurs. I help brands share unique and impactful stories through the use of public relations, advertising, and online marketing. My work has been featured on the Huffington Post, Thrive Global, Addicted2Success, Hackernoon, The Good Men Project, and other publications.