Common Business Insurance Claims and How to Prevent Them

According to one survey we have seen, a business loses $7 off its bottom line for every dollar they collect from an insurance company.  For that reason alone, it is important that businesses do all they can to reduce or prevent insurance claims.

The most common claim we see on business insurance policies (other than workers compensation) is either wind damage or hail damage.  Unfortunately, there is little that can be done to prevent either of them.  But most other claims are preventable.  Here are some examples:

Fires

This is usually the most catastrophic type of claim, and probably the most dangerous.  It is also one of the most preventable. Here is what you can do to prevent them:

• Regularly inspect wiring and heating.  Eliminate any frayed electrical cords.
• Keep combustibles away from heating sources.
• Watch housekeeping.  Clutter breeds fires.
• Control flammable liquids with fire-resistant storage and only keep small quantities on hand for daily operations.
• Be sure fire extinguishers are serviced and up to date.
• Control smoking.
• Be sure there is lightning protection on tall structures.

Falls

These can happen to guests on your premises and to employees. Make sure you:

• Make regular inspections looking for tripping hazards like loose carpet edges.
• Remove snow and ice as soon as possible.
• Clearly mark wet floors and be sure spills are cleaned promptly.
• Make sure stairs have handrails and are well lit.
• Look for and eliminate rough spots or potholes in your parking lot and sidewalks.

Auto Accidents

• Check, or have your insurance company check Motor Vehicle Records regularly on all drivers.
• Prohibit personal use of company vehicles.
• Inspect vehicles regularly to be sure brakes, lights, and other functions are operating properly.
• Have a documented maintenance schedule on all vehicles.

Obviously, there are many, many factors that lead to claims, but a little attention paid to these simple things will do a lot to prevent some and increase your business’s bottom line.