No business wants to file a claim against their commercial insurance policy unless absolutely necessary. One of the simplest ways to reduce risk is to address the most common causes of claims.

The following are the areas your business will want to focus on to reduce the likelihood of claims and possible higher insurance premiums.

Break-Ins & Theft

According to a 2015 study, a fifth of all small business owners filed claims for burglary and theft. However, these claims also have the lowest dollar value, averaging about $8k.

Fortifying your business premises with a quality lock and limiting the number of keys can reduce risk. A monitored alarm system is the Cadillac of systems, but a noisy local alarm and lights can deter thieves, too. Many insurance companies offer discounts for improved security measures.

Water & Ice Damage

Frozen or leaky pipes and leaky roofs are responsible for about 15 percent of claims. Claims cost an average of $17k, as water damage is costly to remedy.

Regular scheduled maintenance of the roof, sprinkler system, plumbing connections, and heating and cooling systems can reduce the risk of claims.

Hail & Wind Damage

Storms can cause extensive damage to all exterior areas of a building and consequently claims are larger with the average around $26k. Even though your business cannot control the weather, it can prepare for the worst.

Regular roof inspections, including a review of HVAC units, skylights, and roof vents, can reduce your risk, too. Sealing cracks and checking window and door hardware can also reduce the chance of movement and damage.

Replacing existing materials with wind and hail resistant materials can also reduce damage and claim amounts. Many insurers offer discounts for buildings equipped with weather-resistant materials, too.

Fire Damage

About 10 percent of small business owners file a claim for damage caused by fire. Naturally, claim amounts can vary widely, but the average cost is about $35k.

Fortunately, the NFPA reports that sprinklers control fires 96% of the time. Most carriers offer discounts for properly installed fire sprinkler systems and monitored alarms, as they greatly reduce risk.

Client Accidents

If someone slips and falls on your property it costs most businesses an average of $20k. These claims occur for about one in ten companies and they’re costly because lawsuits for negligence can include legal fees and medical bills which accumulate quickly. If your business does not have sufficient liability coverage, you can pay out-of-pocket, too.

Businesses need to monitor the weather and devise a plan to respond to risks quickly. Proper lighting, good rubber entrance mats, and prompt snow and ice removal are easy ways to reduce your risk.

Reputational Harm

While claims for reputational harm only happen to one in twenty companies, they pack a punch. The average cost is more than $50k, because over a third of these claims result in a lawsuit. The legal fees to defend your company in such a claim and the cost of settlement are the reason for the steepest cost of all claim types.

Vehicle Accidents

Vehicular accidents are the next most costly of all commercial claims, averaging $45k. A sound safety policy and proper driving training can help reduce risk. Annual driver reviews and drug testing are also valuable tools.

Many companies now utilize telematics to track driver behavior too as some insurers offer policy discounts and fleet management benefits to businesses, no matter their size.

Despite best efforts, companies may need to file claims occasionally. Consequently, your commercial insurance coverage isn’t something you should leave to chance. Discuss your needs with your agent to ensure you have sufficient coverage to protect you from these common risks.

Your agent can also pinpoint any discounts your business qualifies for to reduce your cost and they have access to many products to provide the ultimate benefit for your company.

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