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Three Property Insurance Claims That Prove Costly for Small Businesses

Insurance companies often make it difficult to collect full value for small business property claimsSmall businesses have a lot to worry about. From day-to-day operations to planning for the future, small business owners have to balance the risks and be ready to effectively mitigate the losses when something goes wrong. While smaller businesses suffer from a lot of the same problems that larger businesses do, they can also be more vulnerable after a loss event—and they can’t always afford a long wait to resolve their insurance claims and get on with recovery.

Are you ready for the worst? If you own a small business or often work on property damage claims with small business owners, it’s important to take a look at some common—and commonly very costly—events that commercial properties should be prepared for and protected from.

Common Types of Expensive Damage to Small Business Properties

The circumstances that lead a small business owner to filing an insurance claim can vary, and the same goes for how much it might cost to recover from the damage. However, looking at the general data gathered from all kinds of small businesses across the nation can be revealing. A 2015 analysis of small business claims performed by The Hartford showed that:

  • Small businesses lose a lot to wind and hail. Over five years of claims, 15 percent of small businesses were affected by damage from wind or hail. The average cost of a single wind or hail insurance claim was $26,000.
  • Small businesses lose a lot to water and freezing. Over five years of claims, 15 percent of small businesses sustained losses related to water damage or freezing. The average cost of a claim was $17,000.
  • Small businesses lose a lot in fires. While fires aren’t the most common cause of damage, they are one of the most expensive. Over five years of claims, only ten percent of small businesses were affected by a fire, but the average cost of a fire claim was $35,000.

Don’t make the mistake of assuming that it couldn’t happen to you. The analysis also showed that about 40 percent of small businesses were likely to experience some kind of loss leading to an insurance claim in the next ten years.

In the majority of these kinds of situations, small businesses sustain thousands of dollars in damage in the course of just a few hours—or sometimes even just a few minutes. If you own a small business, these numbers should be strong motivation to review your insurance policies and make sure that you have the coverage you need.

The Financial Toll Common Damages Can Take on a Small Business

Although most businesses are insured against fire and storms, their insurance claims for the property damage aren’t always resolved fairly or quickly, especially when many other homes and businesses in the region have also suffered losses. Insurance companies have a duty to avoid acting in “bad faith” when resolving claims, but some companies still unfairly deny, delay, and underpay claims—and a lot of policyholders don’t understand their rights.

If you are having trouble resolving a business insurance claim or getting fair treatment from your insurer, don’t give up. You can get the help and information you need by talking with one of the experienced policyholder attorneys with the Voss Law Firm at 1-888-614-7730.

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