Four in ten small businesses will file a claim in the next ten years

Most business owners buy insurance hoping never to use it. The numbers say that is optimistic. In March 2015, The Hartford reported that four out of 10 small businesses are likely to experience a property or general liability claim in the next 10 years, based on its analysis of small business claims.

The study looked at five years of claims data (2010 to 2014) from more than one million of The Hartford's business owner's policies. It is a decade old and covers one insurer, so treat it as a rough guide, not a forecast for your business. The Hartford published a 2025 update, and that report said that slip, fall and customer-injury claims had increased and become more expensive.

Most claims are not lawsuits

The Hartford said 35 percent of all general liability claims in its history resulted in a lawsuit. That means most did not. But the lawsuits are where the money goes. The report said that if a lawsuit is involved, a general liability claim can average more than $75,000 per case to defend and settle.

Everyday injury claims were smaller. The 2015 report listed the average customer slip and fall claim at $20,000 and the average customer injury or damage claim at $30,000.

What this means for your limits

According to Triple-I, liability coverage pays damages for which the business is found liable, up to the policy limits. When a covered loss uses up the primary policy, an umbrella (also called excess liability) can start to pay, though most umbrella policies exclude some things, such as professional liability.

Questions for your broker

• What is my liability limit? Per claim, and in total for the year.
• Does the policy pay for my legal defense? Ask whether defense costs count against the limit.
• Would an umbrella make sense? Ask what it would add and what it would cost.
• What does the policy leave out? Ask about professional services, employee injuries and auto, which are usually covered elsewhere.

Triple-I notes that general liability excludes injuries to employees, because employees are usually covered by workers' compensation, and excludes auto liability, which belongs on a business auto policy. It is a good reminder that one policy rarely does everything.

Why one claim can matter more than the average

An average hides the shape of the risk. Most businesses never see a lawsuit, and a few see one that is large enough to threaten the company. Insurance exists for the second group, which is why the limit on your liability policy deserves a careful look, even though it does not change your premium much from day to day.

It also helps to think about who could be hurt on or because of your business: customers, delivery people, passersby, neighbors. Walk through a normal day and note where a fall, a spill or a product problem could happen. Then ask your broker whether the policy would respond to each one.