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Most Common Risks to the Small Business Owner

Tristate Business Insurance Blog

24 February 2019 Bookmark and Share

Tristate Business Insurance - VA, MD, DC

As the backbone of our nation’s economy, your small business plays an incredibly important role. When you are a business owner, you want to systematically assess and mitigate your business risk. Keeping your property, goods, and assets insured from loss only makes sound business sense.  A well thought out small business insurance strategy is one of the most valuable components of your business plan.  Let's review some of the more widespread and dangerous risks to the American business owner. 


Fire is the major cause of property losses by number of claims and value. Of the top 20 reasons for business loss, fire consumes half of the top 20 losses combined.


The Congressional Budget Office estimates that, on average hurricane damage is $28 billion a year. By 2075, the average annual damage costs will increase to $39 billion.


Flooding is one of the major risk trends since many of the world’s largest cities are situated on the coast or beside rivers, exposing them to floods and storms. Natural hazards account for three of the top 10 causes of losses, with flooding ranking in seventh position.

Product Defects

We could almost assume that new items produced are of perfect quality. The truth is that product quality is not always perfect and is directly affected by the reliability of the production process used to produce the products, which we may not always control. Consumers in emerging markets are growing more aware of their rights and are increasingly more likely to seek compensation for faulty products.  

Software Defects

Virtually every business in the United States now depends on software for their development. Software errors are estimated to cost $59.5B annually to the U.S. economy.

Professional Indemnity

Professional indemnity claims are the major cause of losses in the financial lines insurance sector, according to the analyzed portfolio, accounting for 74% of claims by number and 72% by value. 

Bodily Injury

Neglecting to upkeep your premises can be a major risk to your company's bottom line. A bodily injury caused by a defective product can easily turn into a lawsuit just as much an a slip accident due to unsafe conditions at your business, be it an office or a commercial establishment frequented by general public. While employees are typically covered for their injuries by workers compensation, lawsuits filed by visitors who are injured in an accident can be costly.

Machinery Failure

The sectors especially hit by machinery breakdown are energy, marine, property and engineering. In most cases damage to the machinery or complete breakdown is due to crew negligence or heavy weather, e.g. storms. Machinery breakdown is a large driver of commercial property claims in terms of the number generated.

At TriState Business Insurance, our independent insurance agents are highly trained to help you identify the major causes of risk to your business. Trust only independent insurance agents to source the best value for your insurance dollar. Always remember that independent insurance agents serve YOU.  We are not affiliated with any single insurance carrier. That sets us apart from most others. Contact us!

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