Business Insurance Claim Examples: Most Common Types of Business Insurance Claims

Many associate commercial insurance with unexpected events and natural disasters. However, most commercial insurance claims are not related to catastrophic events.

You’re paying for commercial insurance to protect your business. Today, we’re highlighting some of the most common types of business insurance claims along with examples of how those claims may apply to your business.

Burglary & Theft

Burglary and theft claims are the most common types of commercial insurance claims for businesses in the United States.

These claims don’t just involve customers stealing. In fact, roughly half of all claims involve employee theft.

If someone steals from your business, then you could make a claim through your commercial insurance. Some of the coverages that may apply to burglary and theft commercial insurance claims include:

• Commercial property coverage
• Crime endorsement
• Employee dishonesty / theft endorsement

Generally, a commercial property coverage protects your business’s property from damage, loss, and theft. However, many business owners add crime endorsements or employee theft endorsements for added protection.

Of course, you shouldn’t solely rely on commercial insurance to compensate you for theft. Install a security system, setup cameras, or maintain fencing around your property to reduce the risk of a claim.

Customer Slips & Falls

A commercial insurance policy typically includes liability insurance. If a customer slips and falls on your property, then you could be liable for that customer’s medical bills, pain and suffering, and other damages.

You can take obvious steps to protect your business. You can clean up messes as soon as they occur, get rid of loose rugs, and place warning signs around uneven surfaces.

Some businesses also install cameras to monitor the premises – especially if they’re concerned about fraudulent claims.

If your business is dealing with a slip and fall claim, then it falls under the following insurance:

• General liability coverage

General liability coverage covers any damages for which your business may be liable – from medical bills to certain other liable damages occurring on your business’s property.

Water Damage

Water damage claims are among the most common types of commercial insurance claims in the United States. Wherever you live, water can wreak havoc on your business’s property, inventory, and building.

Many business owners are surprised commercial property insurance does not automatically cover flood damage or other specific water damage. Instead, you may need to buy coverage through FEMA/NFIP to protect your business against flood.

You may be able to claim water damage through the following types of coverage:

• Commercial property insurance
• Flood insurance through FEMA or NFIP
• Business income insurance (for loss of revenue related to water damage)

Commercial property damage can reimburse you for water damage caused by burst pipes, leaky roofs, rainstorms, windstorms, and other damage. It should cover most water damage situations faced by your business. Check your policy carefully for “wind driven rain” exclusions. This means that the hail or storm must create an opening in your property. A Public Adjuster can usually spot this language immediately.

However, a standard commercial insurance policy will not cover flood damage. If your business or its inventory is affected by floodwaters, then you may not receive compensation through your standard commercial property damage policy – even if the flooding occurred during an event that would normally be covered, like a hurricane or tornado.

Check your commercial insurance policy and local flood zone maps to determine if you need to add flood insurance coverage for your business.

Product Liability

Your commercial insurance policy could cover product liability. Some businesses also buy additional product liability insurance policies for added protection.

If you sell something to a customer, then you may be liable for any illnesses, injuries, or damages experienced by the customer as a result of your product.

To protect against product liability claims, your business’s commercial insurance may need:

• General liability insurance
• Product liability coverage

Some of the costs you may incur because of faulty products include lost wages, legal fees, the cost of a product recall, medical expenses, and more.

Fire Damage

A standard commercial insurance policy covers fire damage. If a fire damages your business’s property, then you should receive compensation from your insurance company. In fact, fire damage claims are among the most common types of claims in the commercial insurance industry.

Insurance companies recommend taking precautions to prevent fires in the first place. In fact, local regulations require fire suppression systems (like sprinklers) in many commercial buildings. Some areas also require fire drills or other emergency training.

Fire damage insurance claims typically fall under the following types of commercial coverage:

• Commercial property insurance
• Business income insurance (for loss of revenue related to fire damage)

Commercial property insurance should cover the cost of repairing or replacing your property after fire damage, while business income insurance should cover any loss of revenue you experience as a result of that fire damage (say, if your business needs to be shut down for a few weeks during repairs). Be prepared to open your business books, bank accounts, tax returns and other supporting documents for a fire claim.

Windstorm, Hurricane, Tornado, and Hail Damage

A standard commercial insurance policy covers windstorm damage – including hurricane and tornado damage. Your commercial insurance policy should also cover hail damage and other damage caused by severe weather events.

Some of the commercial coverages that could apply to a windstorm, hurricane, tornado, or hail damage insurance claim for your business include:

• Commercial property insurance
• Business income insurance

Your business should also take steps to protect your property from the effects of a windstorm. Trim or remove dead trees, for example, to prevent them from falling on your property during a storm. Take immediate action to protect your property from further damage after the storm.

Other Types of Commercial Insurance Claim Examples

Other common types of commercial insurance claim examples that could apply to your business include:

• Reputational Harm Claims: If your business’s actions damage the reputation of an organization or individual, then you could be liable for the resulting damage. Many media and data storage businesses carry general liability and professional liability policies to protect against reputational harm claims. Reputational harm claims are less common than other claims on this list, but they’re also the costliest. On average, reputation harm claims cost businesses $50,000 per incident.
• Auto Claims: If your business has a fleet of vehicles, or if you require employees to drive for work, then you may need commercial auto insurance. Commercial auto insurance policies cover similar things to personal auto insurance policies, including liability, collision, and comprehensive coverage.
• Struck by an Object Claims: Many commercial insurance claims are considered struck by an object claims. These may be common in industries like construction, agriculture, or manufacturing. Businesses in these industries may carry worker’s compensation or other coverage to protect against being struck by an object claims.

Final Word

Your business is more likely to make a claim for burglary and theft than any other type of loss. Water damage, fire damage, windstorm damage, customer injury, and product liability claims are also common.

Take action today to protect your business from unexpected events in the future.

Review your commercial insurance policy thoroughly to ensure you understand everything covered – and not covered – by your current commercial insurance policy.

Or, for commercial insurance policy disputes and expert claims handling, contact ClaimsMate and schedule a free consultation with a licensed public adjuster.

Stephanie Corona

Stephanie is a property insurance claim expert with over 20 years of experience working as an insurance adjuster, expert witness, appraiser and umpire. She is passionate about sharing her expertise, knowledge, tips and training to help both property owners and Public Adjusters in their pursuit of effectively managing claims and recovering the claim settlement they deserve after a loss.