Most Common and Costly Business Insurance Claims

June 28, 2022

In the world of business, the surest way to free yourself from the shackles of mediocrity is by taking risks. This is the common factor of every surviving and known businesses today. Business owners have taken huge amounts of risks to build an enterprise from scratch with a handful of cash in their bank accounts. With many years of hard work and discipline, a small hole-in-the-wall shop can become a full store with just a number of attendants. This is a dream for entrepreneurs who have decided to leave the corporate world to be their own bosses. However, while a business maintains a certain altitude as it soars, an owner most know that any risk at this rate can either make or break the business he/she built for years. A smart entrepreneur, at this point, is prepared enough for the future of his/her business. They make sure that risks are minimized, and the processes of mitigating said risks are fully laid out to protect their investments. In an entrepreneurial analysis of the Hartford’s small business claims, most small businesses don’t realize that the following insurance claims will most likely become their common claim in the next 10 years. 1. Burglary and Theft According to Hartford, 20% of the business claims are caused by burglary and theft. As your business grows, your capacity to expand becomes bigger. A growing business has been and always will be a target of lawless individuals. As the saying goes, it is tempting to get a piece of that fruitful mango tree. 2. Water Damage The Philippines is situated perfectly in the typhoon belt of the Pacific, making it one of the countries highly visited by typhoons and calamities related to that, like floods and storm surges. Since a lot of businesses are located within the low-lying areas of the Metro, town centers, and along the shorelines, damages due to flooding and storm surge is inevitable. Hartford listed water damage as the second most common claim with 15%. 3. Wind Damage Along with water, wind damages come third with 15%. During typhoons, storm surges and flooding are not the only calamities that could damage real estate and other tangible assets of any business. The wind- in the form of the typhoon’s gustiness- isalso accountable for these damages. 4. Fire Damage No matter how good the infrastructure is, if the wiring and the electrical layout are not well-formed, the possibility of fire occurrence is high. And since this country also happens to be in the tropical region of the world, businesses are prone to fire most especially through the scorching heat of summer. Fire, at 10%, is considered as the fourth most common business claim. 5. Customer Slip and Fall The floor is slippery when wet, as the sign says. This type of business claim occurs mostly on retail and food service side, both of which are two of the largest industries in the Philippines that are very diverse in the sense that small to large companies are all involved. Slip and fall are prevalent usually within their physical stores which make up 10% of business claims. 6. Customer Injury and Damage Accidents occurring and resulting in some serious injury to the customers that either led to temporary or permanent physical defects- such accidents really become more serious problems that could jeopardize the name of the business, most especially the small ones. Customer injury and damage amounts to less than 5% of business claims. 7. Product Liability Product liability claims land at the 7th spot with less than a 5% rate. FMCG (Fast Moving Consumer Goods) businesses and establishments that deal with consumer durables such as appliances and electronics, and other manufacturers are the usual claimants against product liability issues. 8. Struck by Object Though the possibility of this kind of incident happening is low amongst small businesses, this claim landed the 9th spot with less than 5%. 9. Reputational Harm With the advent of social media platforms which enable consumers to broadcast their grievances to a large crowd with a click makes this kind of claim prevalent nowadays. A little ripple of nasty PR or mention on and offline can catch some attention that could replicate the bad ripples and potentially harm your business reputation. With less than 5% of recorded claim, reputational harm landed on the 9th spot. 10. Vehicle Accidents Completing the list are vehicular accident claims at less than 5% recorded rate. Small businesses acquire transportation for delivery and/or personal use to increase efficiency, which in turn could land them on some nasty road and vehicular accident in the absence of traffic discipline. In this age where calamities and lawless acts are unpredictable, a business owner must insure their investments at all costs because losing a business that took years to build could happen in a snap of a finger. *** The author of this article contributed in their own personal capacity. The views expressed are their own and do not necessarily reflect the views of COCOGEN Insurance

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