What's Happening?
The Hartford has released a 10-year analysis of small-business claims, revealing significant shifts in the types and costs of claims. The study, which examined over one million small-business property and liability policies from 2020 to 2024, found that water and freezing damage claims have become the most common, representing 20% of claims in 2025. Fire claims, while only 10% of claims, are now the most expensive, with average costs rising to $80,000. The analysis also noted an increase in slip, fall, and customer injury claims, which have doubled in cost since 2015. The report highlights the growing influence of litigation and legal system abuse on claim costs.
Why It's Important?
This analysis provides valuable insights for small-business owners and insurers,
highlighting the evolving risks and costs associated with common claims. Understanding these trends can help businesses better manage their risk and insurance coverage, potentially leading to more informed decision-making and cost savings. The increase in litigation-related costs underscores the need for businesses to implement robust risk management strategies to mitigate potential liabilities. Insurers may also use this data to adjust their policies and pricing to reflect the changing landscape of small-business claims.
Beyond the Headlines
The findings of this analysis may prompt small businesses to reassess their insurance needs and consider additional coverage options to protect against rising claim costs. The report also raises questions about the role of the legal system in driving up claim costs, suggesting a need for potential reforms to address litigation abuse. As businesses adapt to these changes, there may be increased demand for innovative insurance products and services that offer more comprehensive protection against emerging risks.
