Most Costly Insurance Claims and Proper Insurance Coverage
By: Mary Thompson, Capstone Brokerage President, April 27, 2015
I often have clients call and say what type of claim will cost me the most. I sort of laugh because honestly it is really hard to give them a correct answer… The variables to this question are endless. For example; Cost them how? Financially? Growth wise? Reputation wise etc.? The more I get asked the question it has me thinking; which types of claims are most common and have a history of being the most costly? So I decided to come up with the top three risks that small businesses are most vulnerable if not covered properly.
The very fundamental basics of insurance are that insurance policies are put in place to protect you in the event that something unexpected happens. Unexpected events happen way more often then business owners realize.
In my professional opinion the most common claim a small business will have is burglary or theft of some type. However, that is likely to cost the business a headache and a few new computers shouldn’t be too hard on the pocket book if there is proper property and cyber coverage in place that lists assets.
We also have several claims for a small business for injuries on the job. Workers Compensation claims are on the rise nationally. This is why I advocate employee safety handbooks and seminars to all my clients. It is important to make not only employee safety, but overall safety on your property, a top priority or it could really end up costing a small business with increased premium.
While both burglary and workers compensation claims can be financially costly I feel a company is often most vulnerable when it comes to their reputation. People still trust word of mouth, well if not word of mouth, then companies such as Yelp, Trip Advisor, or Google. Negative publicity can quickly go viral. There is insurance to help protect small business from harmful comments or reviews. This type of coverage can help cover the financial cost of protecting and monitoring a company’s reputation. Large businesses often have this coverage, but smaller businesses do not. Protecting a brand image or company reputation is critical to a businesses success in the digital age.
A dedicated knowledgeable insurance broker can make the world of difference when properly analyzing a company’s individual risk. It is always beneficial to keep your insurance agent up to date with your company’s business practices and any changes that may require additional coverage.
