10 Business Insurance Claims We Saw in 2023

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• Your commercial space could be broken into and ransacked by thieves
• Your tools and equipment could be stolen from a the trunk of your truck
• You could be sued for damages by a customer for a product you sold to them online or in-person
• One of your customers could get injured on your property or as a result of your work
• You could accidentally damage property that belongs to a customer or third party while working
• You could be involved in an auto accident
• Your business could fall prey to internal theft or fraud and lose thousands of dollars
• A cyber-attack or data breach could upend your online operations and threaten your business’s survival

If any of these or other unfortunate events happened to you, how would you pay for the damages that could easily run into several thousands of dollars?

For some professionals or business owners, buying business insurance is a legal or regulatory requirement. For others, it is not. Either way, it’s wise to do so. We can give you 10 real-life reasons why you should.

Although we received more than 10 insurance claims from our clients last year, these are among the more common or noteworthy claims we saw in 2023, and how the coverage they purchased from Zensurance helped them recover quickly:

1. Third-Party Bodily Injury Claim

Client’s Industry: Retail

Incident: A customer alleges to have slipped, fell, and suffered a bodily injury on our client’s premises

Relevant Insurance Coverage: General liability insurance

Over the past year, there have been numerous slip and fall incidents reported by customers entering retail spaces, resulting in allegations of bodily injuries. According to Statistics Canada, slip and fall accidents make up approximately 40% of all injuries in Canada annually.

Often, people who allege they were injured from a fall in a place of business launch a lawsuit against the business owner – a 2022 survey found 7 out of 10 Canadian small businesses had to deal with a legal dispute in the last three years. That is what happened to one of our retail clients. The good news is they have general liability insurance covering them for third-party bodily injuries and property damage.

Claims like these undergo thorough investigation and are often resolved prior to litigation, but not always. Some cases have been successfully defended or denied by insurance adjusters (an insurance company employee who investigates claims to determine their validity) due to insufficient evidence provided by the claimant making an allegation.

Outcome: Our client’s insurance adjuster determined the fall did not happen. As a result, the customer’s claim was quickly dismissed, and no compensation was awarded to them. However, our client’s general liability coverage helped ensure they did not suffer any financial consequences.

2. Third-Party Property Damage Claim

Client’s Industry: General Contractor

Incident: Our client accidentally damaged a customer’s property while working for them

Relevant Insurance Coverage: General liability insurance

Claims stemming from mistakes or negligence by contractors are not uncommon. These instances include accidentally drilling holes through walls and incorrectly installing equipment or infrastructure. The payouts for these claims vary greatly, ranging from as little as $1,000 to as much as $250,000, depending on the nature and scope of the claim.

In this instance, our client accidentally punctured a water pipe while installing an appliance in a customer’s home. The resulting leak damaged their customer’s floor.

Outcome: Our client purchased general liability insurance from us, which covers third-party property damage and third-party bodily injuries. We helped our client receive $14,000 from their insurance provider to cover the cost of repairs caused by the incident in their customer’s home.

3. Commercial Property Damage Claim

Client’s Industry: Personal Care Services

Incident: Our client’s commercial property and business contents were damaged by a water leak

Relevant Insurance Coverage: Commercial property insurance

Unexpected commercial property damage can happen to any small business owner without warning and beyond their control. Such incidents are typically the result of different water sources, such as leaking pipes, toilet overflows, and sewer backups. In Canada, floods and water damage are the leading cause of property damage, costing around $1.7 billion annually.

Whether occupying retail space or running an Airbnb business out of your private residence, having commercial property coverage for water damage is crucial. The payouts for these claims range from $1,000 to more than $100,000.

In this case, our client – a barber – arrived at work one morning to discover their barbershop was damaged by a significant water leak overnight. The leak originated from a burst water pipe in a unit above our client’s commercial space. It damaged our client’s laptops and other electronics. 

Outcome: Our client had commercial property insurance with us. We helped ensure they received $10,000 from their insurance provider to replace their damaged laptop and electronics.

4. Theft Claim

Client’s Industry: Plumbing

Incident: Our client’s transportable tools were stolen

Relevant Insurance Coverage: Tools and equipment insurance

The economy has been a challenging one over the last few years. Countless people are experiencing heightened financial uncertainty, which can lead to a rise in theft. For example, Statistics Canada’s data shows that break-and-enters and property theft accounted for 35% of all crimes nationwide in 2021.

For contractors and skilled trade professionals, theft of tools and equipment from job sites or their premises is a common problem. It’s estimated $46 million worth of tools and equipment is stolen each year from construction sites in Canada.

These thefts can occur despite construction professionals’ efforts to secure job sites, lock trailers, and tool containers. The payouts for the theft of portable tools and equipment can range from $1,000 to $70,000.

In this incident, our general contractor client locked their tools inside their trailer. Regrettably, thieves broke the lock overnight and nabbed all their tools. 

Outcome: Our client was wise to purchase tools and equipment insurance from us. We helped them receive $5,000 in compensation from their insurance provider to replace their stolen tools.

5. Data Breach Claim

Client’s Industry: Finance

Incident: Our client was potentially exposed in a data breach

Relevant Insurance Coverage: Cyber liability insurance

Cybersecurity-related incidents and claims have been increasing annually in the past few years. 

Cyber-attacks and data breaches have become remarkably sophisticated, and any company doing business online, even if only using email, faces the prospect of suffering a cyber-related incident. 

From major malware incidents, data breaches, ransomware attacks, phishing attacks, or distributed denial-of-service (DDOS) attacks to a hacker gaining access to your email account to send your customers fraudulent invoices, cyber incidents can disrupt your business and have a dreadfully expensive impact on you and your customers. It is vital to protect your business with cyber liability insurance and a variety of cybersecurity tools.

Our client operates in the finance industry and uses software from other companies. One of those companies experienced a cyber incident, which resulted in a vulnerability for our client because they use their software. Our client wisely filed a claim in case their confidential information and customers’ data were compromised.

Outcome: Our client had cyber liability insurance. We helped ensure their insurance provider covered over $12,000 in bills to investigate if their data had been breached. That included legal, forensics, and downtime costs. After a thorough review, it was confirmed our client’s data was not compromised (whew!). As a result, they did not need to proceed with legal action against their third-party software provider or compensate their customers.

6. Errors and Omissions (E&O) Claim

Client’s Industry: Finance

Incident: Our client erred in preparing a customer’s financial documents

Relevant Insurance Coverage: Errors and omissions (E&O) insurance

Everybody makes mistakes from time to time. But if you make a mistake or neglect to provide an expected standard of service excellence while working for a customer, and it results in financial or reputational harm to them, you could be in hot water.

Our client, who had this unfortunate experience, is an accountant. She was tasked with completing a financial analysis of a customer’s business, and these documents were used when the company was sold. However, the purchaser discovered errors in those documents, significantly inflating the sale price. They sued our client to compensate them for the difference due to her mistake.

Outcome: Our client had E&O insurance. We helped ensure she received over $20,000 from her insurer to cover her legal defence and settlement costs.

7. Third-Party Bodily Injury Claim

Client’s Industry: Beauty and Aesthetics

Incident: Our client accidentally injured a customer while treating them

Relevant Insurance Coverage: Medical malpractice insurance

The beauty industry includes a broad spectrum of professionals providing beauty and personal care products and services. From hair and skin care to nail salons and spa treatments, it’s estimated to be a $10.7 billion industry in Canada. 

If you work in the healthcare or beauty industries, you likely see hundreds or thousands of patients and clients a year. Usually, your customers are dazzled by and grateful for what you do for them. But if one of those clients has a bad reaction to a treatment, or if you accidentally injure them during a treatment, you can be sued for their injuries. 

These types of claims frequently exceed $10,000 in damages, highlighting the importance for every beauty professional to protect themselves with medical malpractice insurance, whether they work independently or for an employer.

In this instance, our client works in the beauty industry. While providing an eyelash treatment to her customer, she accidentally injured one of the customer’s eyes. Our client wisely filed a third-party bodily injury claim immediately.

Outcome: Our client bought a medical malpractice policy from us. We helped ensure her insurer paid her legal costs and negotiated and covered a financial settlement with her injured customer.

8. Vehicle Accident Claim

Clients Industry: General Contractor

Incident: Our client was involved in an auto accident while driving to a job site

Relevant Insurance Coverage: Commercial auto insurance

Commercial auto insurance is a must-have if you use a personal vehicle or trailer to do your job. 

That’s because a private-passenger car insurance policy does not typically cover the commercial use of a private vehicle. Moreover, if you use a plated trailer for work, it must be insured as a vehicle, as it is not covered under tools and equipment coverage or another auto policy.

Our client is a contractor who uses his personal vehicle for work. While driving to a job site, he was hit by another motorist, which caused significant damage to his car. The driver who hit him fled the scene of the accident. 

Outcome: Our client had optional collision coverage as part of his commercial auto insurance policy. It’s a good thing, too. Without it, he would have been left to pay for the damages to his car the unknown motorist caused. We helped ensure his insurance provider paid over $30,000 to repair his vehicle.

9. Equipment Breakdown Claim

Clients Industry: Food and Hospitality

Incident: Our client’s kitchen equipment suddenly malfunctioned

Relevant Insurance Coverage: Equipment breakdown insurance

If you use expensive equipment for your business, equipment breakdown coverage is the only type of insurance designed to cover a sudden breakdown caused by a mechanical or electrical malfunction.

Our client, in this case, is a restaurant owner. One day, their freezer compressor suddenly failed, though it was a new machine that was well-maintained and presumably in good condition. Because of the sudden malfunction, their frozen food stock had to be thrown away.

Outcome: The warranty on the freezer was not designed to pay for their losses. Fortunately, our client included equipment breakdown insurance in their restaurant insurance policy. We helped ensure they received $4,000 to repair the freezer and cover the cost of the frozen food that was lost.

10. Third-Party Property Damage Claim

Clients Industry: Pet Care

Incident: One of our client’s dogs attacked another dog

Relevant Insurance Coverage: General liability insurance

With an estimated 7.9 million pet dogs in Canadian households, being a professional dog walker can be a lucrative full-time business or side hustle. But anyone working as a dog walker without liability insurance is barking up the wrong tree and could find themselves in a ‘ruff’ situation!

One of our clients – a professional dog walker – was walking multiple canines belonging to different owners when one of the dogs suddenly attacked another in her care. The dog that was attacked suffered serious injury and required emergency surgery from a veterinarian costing $975.30.

Outcome: Fortunately, our client had a dog walker liability insurance policy that included a ‘veterinary fees extension’ rider to cover such unexpected incidents. We helped ensure her expenses were covered quickly by her insurer.

Bad Things Happen to Good People: Protect Your Business

No matter what you do, where you’re located, or how cautious you are, every small business owner or self-employed professional should always expect the unexpected.

As per the real-life claims examples above, things can go awry suddenly and potentially threaten the financial survival of your business. Don’t let it happen to you. Get the comprehensive protection you need by completing our online application for a free business insurance quote.

We’ll get the low-cost coverage you need and tailor your policy to suit your unique requirements.

– Reviewed by Michael McDermott, Director of Underwriting, Mohammad Samin, Senior Claims Advisor, and Reagan Elly, Claims Advisor, Zensurance.