Running a business comes with many rewards—and plenty of risks. No matter the size or industry, companies face potential lawsuits and insurance claims that can cost thousands or even millions of dollars. Knowing the most common business liability insurance claims can help you protect your business and avoid financial disaster.
In this guide, we’ll break down the top 6 claims companies face, what they mean, and how to reduce your risk in 2025.
Why Knowing Common Liability Claims Matters
Business liability insurance is your safety net—but it’s better to prevent a claim in the first place. When a business files frequent or expensive claims, it often results in:
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Higher insurance premiums
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Strained client relationships
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Legal fees and brand damage
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Potential denial of future coverage
Understanding your liability risks helps you take proactive steps to reduce them—saving money and protecting your reputation.
1. Slip and Fall Accidents (Premises Liability)
Claim Overview:
This is one of the most common business liability claims, especially for retail stores, restaurants, and offices open to the public. If a customer or visitor slips, trips, or falls on your property and gets injured, they may sue your business.
How to Avoid It:
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Keep walkways clear and dry
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Use “Wet Floor” signs and non-slip mats
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Ensure adequate lighting in all public areas
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Regularly inspect and maintain flooring, stairs, and entryways
✅ Pro Tip: Install security cameras to document incidents for defense purposes.
2. Property Damage Caused to Others
Claim Overview:
This claim occurs when your business activities or employees accidentally damage a client’s or third party’s property—such as breaking a window while working on-site.
How to Avoid It:
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Train employees on careful handling of client property
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Use protective coverings or barriers during services
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Conduct thorough site inspections before starting any job
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Invest in quality tools and equipment maintenance
3. Product Liability Claims
Claim Overview:
If a product you manufacture, sell, or distribute causes injury or property damage, you can be held liable—even if the problem occurred in the supply chain.
How to Avoid It:
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Test products for safety and defects before launch
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Maintain detailed documentation and supplier quality checks
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Include clear usage instructions and warning labels
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Quickly issue recalls if a defect is found
✅ Pro Tip: Consider product liability insurance as an add-on to your general liability policy.
4. Employee Injuries (Improper Coverage)
Claim Overview:
If you don’t have the right workers’ compensation coverage and an employee gets injured, your business could face lawsuits and medical claims.
How to Avoid It:
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Carry workers’ compensation insurance (required in most states)
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Provide safety training and protective gear
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Conduct regular risk assessments and safety drills
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Maintain a clean, hazard-free workplace
5. Advertising and Personal Injury Claims
Claim Overview:
Many businesses are surprised to learn that general liability insurance also covers claims like libel, slander, and copyright infringement. If a competitor believes your advertising harmed their reputation, they could sue.
How to Avoid It:
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Avoid making false claims about competitors
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Use original content and images—or secure proper licensing
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Train your marketing team on legal ad practices
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Review all promotional material for compliance
6. Data Breaches and Cyber Liability
Claim Overview:
Even small businesses are targets for hackers. If sensitive customer data is compromised, you could be liable for damages, lawsuits, and regulatory fines.
How to Avoid It:
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Install firewalls, antivirus, and encryption software
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Train staff on phishing and cybersecurity protocols
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Use strong passwords and regular system audits
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Consider adding cyber liability insurance to your coverage
✅ Pro Tip: Store only the data you need and use secure, cloud-based backups.
Conclusion: Prevention Is the Best Protection
Liability claims are common—but many are preventable. Understanding the top business liability insurance claims helps you make smarter operational decisions, reduce risk, and keep your insurance costs down.
Here’s a quick recap:
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Keep your premises safe for visitors
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Handle client property with care
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Ensure products are safe and compliant
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Train your team and invest in risk management
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Review your advertising and cybersecurity practices
Insurance is essential, but the best strategy is to avoid the claim altogether. Work with a trusted agent to review your policy annually and make sure your coverage reflects your current operations.