Workers Compensation

The Hartford Reports: More Than 40 Percent Of Small Businesses Will Experience A Claim In The Next 10 Years

Insurer offers advice on how to prepare and protect businesses from common and costly property and general liability claims

Hartford, Conn., March 30, 2015 – Four out of 10 small businesses are likely to experience a property or general liability claim in the next 10 years, according to an analysis of The Hartford’s small business claims. Topping the list for the most common claim is burglary and theft, however, the most costly claim for a small business is reputational harm1, which includes libel, slander and violation of privacy.

“An unexpected event happens more often than many small business owners realize,” said Stephanie Bush, senior vice president of Small Commercial insurance at The Hartford. “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.”

Based on a five year analysis of data from more than one million property and liability policies2, burglary and theft impacted 20 percent of small business owners in the past five years. However, burglary and theft ranked lowest out of the top 10 most costly claims, averaging $8,000, compared to reputational harm claims, which cost $50,000 on average.

A claim payout on a reputational harm claim, covered through a general liability policy, can run much higher if a lawsuit is involved. If a lawsuit is involved, a general liability claim can average more than $75,000 per case to defend and settle. Based on The Hartford’s claims history, 35 percent of all general liability claims result in a lawsuit.

Fire claims are ranked in the top five of both the most common and costly claims. The average cost for a fire claim is $35,000, impacting 10 percent of small business owners in the past five years.

Top 10 Property and Liability Claims

Most Common Most Costly

Burglary & Theft (20 percent)

Reputational Harm ($50,000)

Water and Freezing Damage (15 percent)

Vehicle Accident 3 ($45,000)

Wind and Hail Damage 6 (15 percent)

Fire ($35,000)

Fire (10 percent)

Product Liability 4 ($35,000)

Customer Slip and Fall (10 percent)

Customer Injury or Damage 5 ($30,000)

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)

Struck by Object (Less than 5 percent)

Water and Freezing Damage ($17,000)

Reputational Harm (Less than 5 percent)

Struck by Object ($10,000)

Vehicle Accident (Less than 5 percent)

Burglary and Theft ($8,000)

“A small business owner can take steps to avoid these types of claims,” said John Kinney, chief claim officer at The Hartford. “By making simple modifications to operating procedures or following a few safety tips, a business can be better positioned to prevent accidents and property damage.”

Based on the claims data, The Hartford recommends small business owners follow these tips:

Burglary and Theft:

  • Conduct background checks.
  • Have adequate devices installed to control unauthorized entry into your business.
  • Install fencing and gates around the building and parking areas.
  • Ensure adequate exterior and interior lighting.

Reputational Harm:

  • Avoid criticizing a competitor publicly or to customers.
  • Be sure to have permission to post photos or other content on your website to avoid copyright infringement.

Water and Freezing Damage:

  • Maintain proper indoor temperature during periods of extremely cold weather, even when away.
  • Clear roofs and overhangs of excessive snow and ice if possible.
  • Ensure that key personnel know the location of water shut-off valves.


  • Establish or update an emergency preparedness plan.
  • Plan fire evacuation routes, mark them clearly and drill employees in using them.
  • Test all fire and life safety detection and suppression equipment per local and national fire codes.

Wind and Hail Damage:

  • Treat and maintain trees.
  • Protect windows from flying debris.
  • Walk the grounds; move objects inside that could become projectiles in high winds.
  • Anchor any equipment stored outside that could be moved by high winds.

Vehicle Accidents:

  • Screen employee driving records before allowing them to use their car for business purposes.
  • Do not provide incentives to drivers for speedy deliveries.

Let’s talk.

Our licensed agents can help you select
the best solution for your firm.

Call us at 855-237-5335

Evaluating your current insurance?
Contact us for a free policy review.

Client Services & Support

Property & Casualty (Workers’ Comp)
  Request a Certificate of Insurance

Health & Benefits (Group Health Insurance)

1Reputational harm claims include financial damages from libel, slander, defaming products or services, or violating privacy.

2The information outlined in this release is based on an analysis of five years of claims data (2010-2014) from more than one million of The Hartford Business Owner’s policies.

3Vehicle accidents include accidents involving employees of the small business owner who use their personal vehicles for business purposes. Average costs can be higher if a lawsuit is involved.

4Product liability insurance may apply to injury or damage arising out of the use of a covered product.

5Customer injury and damage covers damage to the customer’s property and injury to the customer caused by the insured small business owner.

6The wind/hail claims generally involve structural damage, primarily to roofing or signage.

Content provided courtesy of The Hartford.

Copyright © 2015 The Hartford. All rights reserved. “The Hartford” is The Hartford Financial Services Group and its subsidiaries.

The information contained herein represents the products and services available through only one of the business groups of Automatic Data Processing Insurance Agency, Inc. (ADPIA). ADPIA services mid and large size clients with various insurance products and services through its other business groups.

All insurance products will be offered and sold only through Automatic Data Processing Insurance Agency, Inc., its licensed agents or its licensed insurance partners; 1 ADP Blvd. Roseland, NJ 07068. CA license #0D04044. Licensed in 50 states. Certain services may not be available in all states. Automatic Data Processing Insurance Agency, Inc., works with several insurers and is not an exclusive agent for The Hartford, Automatic Data Processing Insurance Agency, Inc. is an affiliate of ADP, LLC. This information is general and not intended as tax or legal advice. If you have questions on how this may apply to your specific situation, please consult your tax or legal advisor. The ADP logo, and ADP are registered trademarks of ADP, LLC. All other trademarks or service marks are the property of their respective owners. Copyright ©2016 ADP, LLC