40% of Small Businesses Can Expect to File an Insurance Claim
Many small business owners struggle when deciding how much, if any, insurance they should purchase and what types. There is the constant battle of the budget and being sufficiently insured without being “over protected” in any specific area. When we ask a business owner if they think they’ll need to file an insurance claim, the majority say they don’t think so. However, filing a claim happens more frequently than business owners believe.
One question that often comes up is, “How likely is it that I’ll need this coverage?” A study by The Hartford, a financial services company, found the answer to that question after reviewing over a million policies that covered a 5-year period. This study shows that 40% of small businesses will experience a claim within the next 10 years.
Top 4 claims
The top 4 claims were, in this order:
- Burglary and Theft (20%)
- Water and Freezing Damage (15%)
- Wind and Hail Damage (15%)
- Fire Damage (10%)
Know you’re properly insured
Key to our industry, the home and business inventory sector, we see that 3 of the top 4 losses will be well served by having a contents inventory. Knowing what you own, and being able to prove ownership, will assist with completing a thorough insurance claim. Without this information, you will struggle to remember many of your company’s assets. Being able to prove value is also essential. Recording model numbers and serial numbers, along with a photo, will support your claim.
Once the inventory is compiled, and the costs assigned to each item, this document will serve as a valuable item when deciding what dollar amount of coverage you will need to recover appropriately after a loss.
An open conversation with your agent will help you make an educated decision about the risks you face with your business. After all, insurance is really risk management, and having the right types of insurance, along with sufficient coverage, will enable you to recover from your losses.