On March 30, 2015, The Hartford published an analysis of five years of claim data involving small businesses. The study involved more than 1 million of The Hartford’s Business Owner’s policies between 2010 and 2014. The link to The Hartford’s report is at the bottom of this post.
Libel, slander defamation and privacy violations most costly claims
The Hartford found that the most common business claims involve burglary and theft. In its study of more than 1 million of The Hartford’s Business Owner’s policies for property and liability, Policies Hartford found that 20% of the small business owners had been impacted by burglary and theft within the last five years. In the listing of the 10 most common claim 6 and the 10 most costly claim categories reproduced below, the average burglary and theft claim top the frequency list but was on the bottom of the cost list.
In contrast, the most expensive claims involved “reputational harm” that The Hartford defined as “claims include[ing] financial damages from libel, slander, defaming products or services, or violating privacy.” These reputational harm claims, however, were the second least common claims after vehicle accidents according to The Hartford’s listing. Vehicle accidents although the least frequent type of claim in the top 10, was second only to reputational harm claims in cost.
Claims are more frequent than many small business owners realize
Stephanie Bush, senior vice president of Small Commercial insurance at The Hartford stated in the release that, “An unexpected event happens more often than many small business owners realize.”
She went on to say that “It is important that a small business owner work with a local independent agent to find the right coverage to protect them at various stages of their business and minimize the impact of a potential claim.”
Just as Ms. Bush suggests that small businesses may wish to work with a local independent agent, local independent agents may well wish to use this interesting report from The Hartford to educate their insureds as to their actual risk of a claim being substantially higher than they may perceive.
| Top 10 Property and Liability Claims | ||||
| Most Common | Most Costly | |||
| Burglary & Theft (20 percent) |
Reputational Harm ($50,000) |
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| Water and Freezing Damage (15 percent) |
Vehicle Accident ($45,000) |
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| Wind and Hail Damage (15 percent) |
Fire($35,000) | |||
| Fire (10 percent) |
Product Liability ($35,000) |
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| Customer Slip and Fall(10 percent) | Customer Injury or Damage($30,000) |
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| Customer Injury and Damage(Less than 5 percent) |
Wind and Hail Damage($26,000) | |||
| Product Liability(Less than 5 percent) | Customer Slip and Fall ($20,000) |
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| Struck by Object (Less than 5 percent) |
Water and Freezing Damage ($17,000) |
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| Reputational Harm (Less than 5 percent) |
Struck by Object ($10,000) |
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| Vehicle Accident (Less than 5 percent) |
Burglary and Theft ($8,000) |
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“Customer injury and damage” covers damage to the customer’s property and injury to the customer caused by the insured small business owner.
We have put the link below to The Hartford News Release related to this article and hope that if you access it that you have signed up on our mail list. The Hartford News Release has additional information including The Hartford’s tips, that an agency can use to advise its insureds, about reducing its claim risks. The link is The Hartford’s News Release on Small Business Claim Risks.
