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

March 30, 2015

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

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

Water and Freezing
(15 percent)


Vehicle Accident 3

Wind and Hail
Damage 6
(15 percent)



(10 percent)


Product Liability 4

Customer Slip and Fall

(10 percent)


Customer Injury or
Damage 5

Customer Injury and

(Less than 5 percent)

    Wind and Hail Damage


Product Liability

(Less than 5 percent)


Customer Slip and Fall

Struck by Object
(Less than 5 percent)


Water and Freezing

Reputational Harm
(Less than 5 percent)


Struck by Object

Vehicle Accident
(Less than 5 percent)


Burglary and Theft


“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.

To learn more about safety tips to protect a small business visit: or to learn more about property and general liability protection options.



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


The 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.


Vehicle 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.


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


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


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


About The Hartford

With more than 200 years of expertise, The Hartford (NYSE:HIG) is a leader in property and casualty insurance, group benefits and mutual funds. The company is widely recognized for its service excellence, sustainability practices, trust and integrity. More information on the company and its financial performance is available at Join us on Facebook at Follow us on Twitter at


Some of the statements in this release may be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. We caution investors that these forward-looking statements are not guarantees of future performance, and actual results may differ materially. Investors should consider the important risks and uncertainties that may cause actual results to differ. These important risks and uncertainties include those discussed in our 2014 Annual Report on Form 10-K, subsequent Quarterly Reports on Forms 10-Q, and the other filings we make with the Securities and Exchange Commission. We assume no obligation to update this release, which speaks as of the date issued.

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The Hartford
Debora Raymond, 860-547-4611
Michelle Symington, 860-547-5385

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