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Common business insurance claims and how to protect your business

Being aware of common business insurance claims can empower you to take proactive measures to safeguard your business and minimise the chances of having to make a claim yourself. Find out everything you need to know in this handy guide.

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As a business owner, you can take several steps to lower the risk of a business insurance claim. Read on to find out what they are.

Common business insurance claims

Some of the most common insurance claims faced by business owners are: 

1. Theft and burglary

Theft is a major driver of business insurance claims. Property damage and stolen goods can result in significant financial loss. A knock-on effect is that customers can quickly lose trust in a business with security issues, particularly if repeated thefts occur. 

2. Storm damage

Bad weather can cause significant damage to your business, whether due to heavy rain or high winds. Flooding can result in ruined stock and electrical issues, while high winds can batter the exterior of your business premises – all leading to extensive repair bills and large insurance claims. 

3. Employee injuries

There are numerous ways employees can get hurt at work. Depending on the type of business you run, they could suffer from slips and falls, repetitive use injuries or accidents when lifting heavy equipment or using machinery. 

4. Business interruption 

Business interruption is another common claim. For instance, your business might have to close temporarily due to fire, flooding, or broken equipment. Business interruption insurance compensates you for loss of earnings when your business cannot operate. 

5. Liability claims

You could be vulnerable to product liability claims if your business manufactures or sells a product that somehow injures its customers. The costs can be significant if legal action follows such an incident. 

Public liability insurance claims are also fairly common. A member of the public might claim compensation if you damage their property or cause an injury during your work – for example, if you spilt a hot drink on a customer in your café. 

How to prevent business insurance claims

As a business owner, you can take several steps to lower the risk of a business insurance claim. You can find some outlined below:

1. Secure your business

Install a high-quality security system alongside industry-approved window and door locks to make your premises more secure and reduce the risk of burglary. 

Make sure you have adequate interior and exterior lighting to help deter break-ins. And use a safe to store cash and other valuables at the end of the day.

2. Carry out regular maintenance work on your premises 

Getting your roof assessed by a qualified professional is a sensible precaution to ensure it can cope with heavy rain or winds, reducing the risk of storm damage and having to make an insurance claim. 

Clear out blocked gutters and drains, and if you know a storm is on the way, tie down any loose objects outside the building that could blow around and cause damage. You can also secure any fences near the property. 

If your area is particularly prone to flooding, sign up for free flood alerts and make sure you have a flood plan in place, which includes your insurance policy number, emergency contacts and a staff evacuation plan. You should also know how to cut off electricity and gas supplies  –  indeed, you may wish to consider raising electrical sockets above the predicted waterline. 

It’s also advisable to store valuable documents and equipment somewhere safe – ideally on higher levels. 

3. Check equipment

Ensure all equipment and machinery are properly maintained and in good working order. Make any necessary repairs as soon as possible. Regular maintenance will reduce the risk of equipment breaking down and injuring your employees. 

4. Prepare for the unexpected

While you can’t prevent the unexpected from happening, having a contingency plan in place can help minimise the impact on your business operations. Contingency planning could include training several staff members to perform key tasks or investing in a backup generator so you have an uninterrupted electricity supply if there is a mains power outage. 

5. Quality control

Establishing a quality control system is a sensible step in reducing the chances of making a liability claim. It could involve employees or managers checking each other’s work to help reduce mistakes or carrying out appropriate safety checks before launching a new product. 

Develop written procedures and instructions for all staff to follow and make sure all processes are well documented.  

How to manage health and safety risks at work

When looking to prevent injury and accidents around the workplace, the first step is to create (and regularly update) a health and safety policy. Look around your workplace and think about any hazards that could pose a risk to staff or customers. 

A health and safety review should include:

  • The type of equipment in use

  • Whether staff are working on a fixed computer for long periods

  • Any trip hazards

  • Whether staff are in contact with chemicals or substances 

  • Whether staff are working long hours or have a heavy workload

Your next step is to assess any risks you find and look for ways to control and minimise them. For example, you may wish to improve corridor lighting or invest in anti-slip mats for certain areas. If staff spend extended time working on a computer, you should conduct workstation assessments and provide eye tests. 

On top of this, it’s important to provide appropriate training for staff members, such as how to operate machinery or lift heavy equipment correctly. Be sure to provide appropriate personal protective equipment (PPE) where necessary, such as hard hats, gloves, high-visibility clothing and face masks. 

Finally, it’s essential to have clear safety signs to highlight workplace risks and lower the chances of an accident.   

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