If you own a company, it's almost impossible to avoid business insurance claims. However, there are things you can do to minimize the risk.
If business insurance claims never came up, well, there'd be no reason for business insurance. Unfortunately, accidents do happen, and claims do arise. Some, such as certain property claims, are avoidable with a little preparation. But some things you can't do anything about, like tornadoes and other weather phenomena. Just as you protect your business by taking out an insurance policy, you should also prepare your business by becoming familiar with the most common business insurance claims and understanding how you can prevent them.
The hidden risk
Not surprisingly, the most common business insurance claims are related to theft or burglary. It's a disheartening fact to be sure, but it remains a fact nonetheless. Even more disheartening is that many thefts come from inside the business itself. That means you not only have to take measures to stop theft from the outside, but you also have to consider the security of your business from the inside.
If you don't already have one, install a security system. At the bare minimum, it should include an alarm for potential break-ins and surveillance cameras. These features serve as a deterrent for both employee and external theft.
If you keep cash on company premises, make sure it's securely locked up and that as few people as possible know the location. If you own a store that uses cash registers, invest in registers that require access codes so unauthorized persons can't open them. Use an onsite safe and when you can, don't leave any cash on the premises at all, even if it means a daily trip to the bank on the way home.
To protect against external theft, make sure to turn the lights off at your business while keeping bright lights on in the parking lot and store front. Especially if you own a business in a city, a security gate helps to deter unwanted visitors after hours. The key is to strike a balance between safety and maintaining an inviting business.
The elemental risks
Wind, hail, and other weather-related damage are also primary reasons for business insurance claims. There's only so much you can do to protect against inclement weather, but the investment of time and resources can save you thousands in repairs should severe weather occur. If a hurricane is approaching, board the windows of your business to protect against wind and hail. Use sandbags to help prevent flooding. Turn off all electrical equipment and plug all of your devices into surge protectors (or unplug them altogether). Make sure your building is free from pre-existing leaks and other structural weaknesses that might exacerbate weather-related damage. (If you rent, ask your landlord about this.)
Water and freezing temperatures contribute to many business insurance claims as well. Have a plumber inspect your building regularly to make sure the pipes are in good working order. In the winter, don't turn the heat too low over the weekend or other times when your business is unoccupied, as pipes can freeze and burst. Make sure the gutters and other drainage devices are clear of debris (including snow in the winter) and that there is no snow on the roof.
Another leading cause of claims is fire. Particularly in the age of technology, make sure you don't have too many devices plugged into a single outlet. Have your building inspected to ensure it's up to code. Don't leave hot plates and space heaters on unsupervised, and avoid any open flames, such as candles. They won't be worth the ambiance if something goes up in flames!
Protect your people
Not surprisingly, personal injury claims also appear on the list. Customers who slip and fall are perhaps the most common, but any customer or employee injury can result in thousands and even millions of dollars in claims, not to mention it can give your business a bad reputation if you handle the situation poorly.
If you clean the floors during the day, make sure slippery places are clearly labeled, and try to limit cleaning to the end of the day or outside business hours altogether. Make sure walkways are clear of snow and debris, especially when it's raining out. Put up signs anywhere a hazard might exist, and when in doubt, rope off the area so no one accidentally enters. Imagine your family members are walking through your business. What would you want them to avoid?
Use common sense and courtesy
The most important thing you can do to reduce the risk of business insurance claims is to use common sense and courtesy. Take precautions if and when danger approaches, treat people the way you'd like them to treat you, and think more about your business's well-being than about the time or resource investment in prevention. It could save you thousands down the line.
Is bad weather on the rise in your area? We've got you covered. Contact a Pekin Insurance agent today.
Have you had to deal with business insurance claims recently? What advice would you offer business owners? Tell us your stories in the comments below.