Avoiding the Five Most Common Business Insurance Claims Part 1
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Avoiding the Five Most Common Business Insurance Claims Part 1

saginaw bay underwriters insurance

It may seem like filing an insurance claim is an unusual situation for a business, but the fact is that for most small and medium-sized organizations, losses do happen.

Since this is the case, it’s beneficial to know what the most common business insurance claims are, what type of insurance coverage is needed and most importantly, how these kinds of claims can be avoided in the first place.

Saginaw Bay Underwriters has created this two-post series entitled “Avoiding the Five Most Common Business Insurance Claims” to help businesses and organizations be more aware of the risks they face, and suggest ways to address them effectively through prevention and insurance coverage.

Here in Part 1, we’ll look at the two most common business insurance claims.


Many business insurance claims involve crime, which includes burglary and employee theft. While employers should be able to trust their employees, it’s important to keep in mind that 42% of U.S. retail inventory loss is due to employee theft.

A growing risk in this area is cyber crime, which can take a number of increasingly common forms, including phishing, social engineering, ransomware and malware attacks, business email compromise, and data breaches.

Insurance coverage needed: Commercial property insurance, along with crime and employee dishonesty/theft coverage, and cyber insurance.

Avoiding the claims: To help prevent break-ins, consider investing in security measures like fencing, lighting and a quality security system.

Discouraging and reducing employee theft is comparatively more difficult. However, consider the following:

  • Compare your company’s wages and benefits with similar companies in your industry. If employees feel undercompensated, theft becomes more likely.
  • Be sure to run background checks on potential employees and get to know the people you hire.
  • Communicate policies, expectations and consequences clearly in your employee handbook, trainings, etc.
  • Make sure employees can anonymously report wrongdoing.
  • Implement unobtrusive supervision of employees, particularly if you have reason to suspect employee theft.

When it comes to cyber risk, please see these posts from our blog for some great starting points:

“How to Protect Your Small Business From Cyber Risks”

“How to Keep Your Benefits Plan Safe From Cyberattacks”

“Business Email Compromise Basics [infographic]”

Damage From Water

Water-related damage claims are another common claim for businesses. These kinds of claims can be due to a number of things, including flooding, burst pipes, snow and freezing temperatures.

Insurance coverage needed: Commercial property insurance typically covers water-related damage due to snow, burst pipes and freezing temperatures. You may also want to consider business income insurance, which can reimburse you for revenue loss due to a water-claim-related closure.

It’s important to know that flooding is typically not covered by commercial property insurance. If you’d like to know more about flood insurance, whether you need it and what’s involved with acquiring it, please contact a business risk advisor.

Avoiding the claims: Keep your roof(s) clear of snow and ice. This will help prevent ice dams and roof damage. Be sure that someone’s always available to shut off the water to your building in case of a plumbing issue, such as a burst pipe. In the winter, keep properties above 55 degrees, or frozen pipes become a greater risk.

Making the Complex Simple

For businesses and organizations, it is vital to understand the most common business insurance claims and how to address them.

In Part 2 of this series, we’ll look at the remaining items on the list.

Call Saginaw Bay Underwriters at (989) 752-8600 if you’d like to speak with a business risk advisor about how to prevent and insure yourself against risks like these.

Saginaw Bay Underwriters has made every attempt to ensure this information has been obtained from reliable sources. Current as of: April 2021