According to research from the Hartford, a US-based insurance company, more than 40% of small businesses will file an insurance claim by 2025.
But what are the most common types of property damage that small- and medium-sized businesses (SMBs) need to be aware of?
Below, we highlight 4 of the most common sources of SMB property damage:
#1: Water & Freezing Damage
Water damage is one of the most common types of property damage that SMBs encounter, just like it is for homeowners.
The reason for its frequency is simple enough: water damage can be caused a lot of different things – from frozen pipes to faulty appliances, water heaters, AC units, and so much more.
Weather can also play a large role in water damage. For example, if your SMB is located in a region that experiences cold winters, your risk of frozen and burst pipes is much higher.
Similarly, storm-related flooding can be quite common in coastal regions and low-lying areas that are prone to flooding.
Water damage, regardless of the cause, can be a major headache to deal with. It is the most common reason for insurance claims in the United States, affecting 14,000 people every day.
And considering that the cost of repairing water damage can be as much as $100,000, it’s important to look for ways to prevent and mitigate water damage from occurring in the first place.
#2: Wind and Hail Damage
While many may not think about the possibility until after the damage has occurred, strong winds, hailstorms, and other kinds of storms can cause considerable property damage to a business, resulting in some pricey repairs.
When winds exceed 50 or 60 miles per hour, they can even harm trees, causing them to fall on structures, and uproot objects like signs and streetlights.
According to a Verisk estimate, 6.2 million properties in the United States were affected by one or more hail storms in 2020, resulting in over $14.2 billion in insurance claims.
Whether you live in Arizona, Florida, or one of the “hail alley” states like Texas, Colorado, and Minnesota, it’s important that your business is prepared in the event of a wind or hailstorm.
Check out this guide for tips on how to protect your business from wind and hail damage.
#3: Fire Damage
Fires have always been a problem for property owners. In fact, according to the National Fire Protection Association (NFPA), over 500,000 structural fires occur in the United States each year, costing an estimated $10.7 billion in property damage.
But did you know that one-fourth of these fires occur in commercial, industrial, and institutional buildings?
But fires aren’t just one of the most common causes of property damage to SMBs, they’re also one of the most expensive with the average cost of fire restoration ranging from $3,000 to $40,000 (not to mention the cost of business lost while your business property is being repaired).
So how do you reduce the risk of property fire damage?
Well, like with water damage, the causes of property fires are numerous, ranging from electrical and lighting issues to unattended cooking. For tips on how to reduce risk and increase safety, check out our guide here!
#4: Theft & Burglary Damage
If you own a small business, you're probably aware that theft and burglary can have a significant financial impact.
According to an Insureon poll of more than 3,000 small business owners, 22% of small businesses experienced a burglary or theft in 2018. Moreover,
Moreover, burglary and theft account for 20% of all small business claims, according to The Hartford, with each incident costing an average of $8,000 per company.
While you can't secure your business against all types of theft and break-ins, you can take precautions to limit the damage if something goes wrong.
The most crucial step? Assuring that your company's locks are as safe as possible!
Experts often recommend pin tumbler cylinder locks and twin cylinder deadbolt locks, which are both readily available at your local hardware shop.
If you want to have a bit of extra peace of mind, Notion Sensors can also be installed on your business's doors and windows. When either is opened, you'll get an alert on your phone, giving you extra time to react in the case of a break-in.
Whether you own or lease your company property, keeping it safe (both inside and out) should be a top concern
As a result, it's critical to understand the most significant hazards and what you can do to reduce them.
Hopefully you learned a few new ways to keep your business safe!