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10 Common and Costly Business Insurance Claims


Wouldn’t it be nice if you had a crystal ball that told you exactly what was going to happen, enabling your business to prepare in advance? While we can’t predict the future, we can do the next best thing by showing you which losses are most likely. The following are some of the most common and costly business insurance claims.

Car Crashes

The NHTSA says there were more than 6 million police-reported non-fatal traffic crashes in 2021. Nearly 2.5 million people were injured in these accidents. There were also nearly 43,000 traffic fatalities.

You don’t need to be in the transportation sector to have car-related risks. If your workers ever drive from one worksite to another, pick up supplies, drop off materials, or transport clients, you have vehicle exposures. In addition to meeting Hawaii’s auto insurance requirements, businesses may want to protect themselves with higher liability limits as well as hired and non-owned coverage for vehicles the business uses but doesn’t own.

Fire Damage

The National Fire Protection Association says U.S. fire departments responded to approximately 1.5 million fires in 2022. These fires caused approximately $18 billion in property damage – even a small fire can cause significant damage. Businesses can secure coverage under their commercial property insurance policy.

Slips, Trips, and Falls

The National Safety Council says more than 6.9 million people received treatment in emergency rooms for fall-related injuries in 2021. In fact, falls are the leading cause of death for older adults. If a customer slips on a wet surface or trips over a hazard on your premises, you could be hit with a lawsuit – but commercial general liability insurance provides coverage.

Product Liability

The Product Liability Litigation Report from Lex Machina shows that product liability cases have increased in recent years. If your company is sued for property damage or bodily injury caused by one of your products, product liability insurance will provide financial protection against the legal costs.

Water Damage

According to Forbes, water damage caused by clean water typically costs $4 to $7 per square inch to repair. If the water is contaminated, the costs can be even higher.

A commercial property insurance policy will typically cover some types of water damage, such as damage caused by a sudden and unexpected burst pipe. However, you may need to add a sewer backup endorsement to secure coverage for sewer-related issues. Since coverage excludes water damage caused by flooding, you’ll need a separate flood insurance policy.

Storm Damage

Severe storms can cause hail and wind damage. In Hawaii, hurricanes are a major concern – you can purchase hurricane insurance separately. Businesses may also like to consider a parametric hurricane insurance policy that pays based on the occurrence of a hurricane rather than actual losses incurred.  


According to the National Retail Federation, retail crime caused losses of more than $112 billion in 2022. Theft can take many forms, including employee theft, shoplifting, and burglaries. A commercial property insurance policy may cover burglaries and looting, but it will typically exclude employee theft and shoplifting. According to Investopedia, businesses can also secure business crime insurance to cover fraud, embezzlement, theft, forgery, and other business crimes.

Business Interruption

After a fire, storm, or other loss, a business may be unable to open. As a result, it will lose out on revenue in addition to dealing with property damage losses, which can be devastating. The good news is business interruption coverage is available as an add-on to a commercial property or businessowner’s policy. 


The Internet Crime Complaint Center received 800,944 complaints in 2022, accounting for $10.3 billion in losses. IBM estimates that the average cost of a data breach in 2023 was $4.45 million. Cyber insurance provides financial protection for the costs associated with a cyberattack, including for recovering data, repairing computer systems, and notifying customers whose data may have been affected.

Employee Claims

Since your workers interact with your business more than anyone else, it’s logical that they can also be a major source of claims. Workers’ compensation covers employees who are injured on the job, whereas employment practices liability insurance provides coverage for claims involving wrongful termination, discrimination, harassment, and other employment-related issues.

You May Have Other Exposures

Every business should be prepared for the above risks, but your business may have additional exposures. Depending on your location, earthquakes and volcanic eruptions might be a major concern. Your business activities may mean that intellectual property claims are a risk, or you may need commercial inland marine insurance to cover property in transit. A FICOH insurance agent can help you review your insurance needs. Find an agent.