Gather ‘round, small business owners. If the question “Do I really need insurance?” has been keeping you up at night, then, boy, do I have some interesting stories for you. The good news is that each one of these small business insurance claim examples has a storybook ending.
Let’s spill the tea about what went wrong and how insurance stepped in to help real small business owners just like you continue doing what they love. Plus, get a free checklist below to match your risks to the right coverage.
Why Real-Life Claims Stories Matter
The hope: Your business is successful and nothing bad happens, ever
The reality: Claims happen even to the most careful solopreneurs
Real-life claims examples matter because they demonstrate the importance of covering your unique risks. Here at Insurance Canopy, we want you to pursue your business dreams fearlessly, but with a smart, practical safety net in place just in case.
Learn from other business owners’ stories to see exactly what small business insurance can do for you when it really counts.
Insurance Claim Examples From Small Business Owners
I scoured our files for real insurance claims across the many industries we cover. These are some I just had to share with you. I’ve adjusted a few details to protect privacy, but the lessons are 100% real.
Cleaning Business: A Shattering Moment
A cleaning professional was making her client’s bathroom sparkle during a weekly cleaning. As she worked on the shower section, she accidentally slid the glass shower door shut a bit too hard. It shattered into hundreds of pieces across the tile floor. The client, while amicable, asked our policyholder to cover the cost to replace the door.
The Policy They Had: Cleaning Business Insurance
The Coverage That Helped: General Liability Insurance
Claim Payout Received: $7,355
✔️The truth is, this glass shower door could have had pre-existing cracks, with built-up stress, but it just happened to shatter while our policyholder was on duty. House cleaning insurance protects you if you accidentally damage a client’s property during a job.
Catering Business: Dreaded Salmonella
A catering business owner landed a dream wedding gig. They painstakingly created the menu and served food on the big day with full confidence. But their worst nightmare happened: several guests fell ill, with one hospitalized from salmonella and diagnosed with colitis. Then came the lawsuit and negative word of mouth.
The Policy They Had: Food Business Liability Insurance
The Coverage That Helped: Product Liability Insurance
Claim Payout Received: $62,500
✔️Whether it’s caused by a produce supplier issue or a faulty warmer, foodborne illness is a serious risk you face. Catering liability insurance saved our policyholder’s business by defending them and paying damages awarded to the guest who got sick. The caterer can still say “I do” to upcoming contracts because they have the right coverage.
Pro Tip:
Small business insurance costs less than you think. Some low-risk businesses pay $10/month — way cheaper than a $62K lawsuit! See how affordable protecting your business could be: Small Business Insurance Cost Guide.
Petcare Business: The Groundhog Incident
A pet sitter was taking her client’s dogs out for a walk to end the day. It was all fun and games until… groundhog! The pups raced toward the rodent, and, in their frenzy, ended up scuffling with each other. One dog suffered minor abrasions, which required a vet visit — no fun for either the human or the animal.
The Policy They Had: Pet Business Insurance
The Coverage That Helped: Animal Bailee Coverage/Veterinarian Expense Reimbursement
Claim Payout Received: $5,000
✔️Pets are family, so it’s no surprise clients take their care very seriously. If animals get injured under your watch, it’s crucial to have a financial safety net to cover your business’ liability. With insurance, our policyholder handled the situation like a pro, maintaining client (and dog) trust flawlessly.
Lawn Care Business: The Little Pebble That Could
A small lawn care company was weed-whacking a client’s lawn when all of a sudden, a large crack appeared on the client’s sliding glass door. The culprit? A tiny pebble — shot from the string trimmer like a bullet. Our policyholder received a repair bill and a hit to his reputation.
The Policy They Had: Landscaping Business Insurance
The Coverage That Helped: General Liability Insurance
Claim Payout Received: $999
✔️The tiniest debris can cause significant expenses. You never know when you might face a property damage claim, but general liability insurance is designed for these exact moments. In this instance, our policyholder showed his professionalism and was able to make things right with his client.
Art Business: Not in Kansas Anymore
An artist set up her booth at a weekend fair to sell handmade jewelry. Out of nowhere, the sky darkened, and a tornado whipped through the grounds. Our policyholder made it out safely, but her entire booth and a significant portion of her inventory were destroyed. All those hours spent creating, and she had to start again from scratch.
The Policy They Had: Art Vendor Insurance
The Coverage That Helped: Inland Marine Insurance
Claim Payout Received: $8,000
✔️It’s heartbreaking when your business equipment or inventory gets stolen or damaged. Loss like this puts a major stall on your business, but with inland marine insurance, you can recover more quickly — without paying out of pocket to replace your things. Our policyholder got the financial help she needed to continue creating and selling her one-of-a-kind goods.
Fitness Business: BOSU Ball Nightmare
A fitness professional was leading a group Pilates class. The energy was high, and clients were feeling the burn. When it was time to incorporate stability tools, a 72-year-old attendee tripped over another student’s water bottle while carrying a balance ball. Unfortunately, she dislocated her shoulder and needed surgery.
The Policy They Had: Fitness Professional Insurance
The Coverage That Helped: General Liability Insurance
Claim Payout Received: $42,500
✔️A simple accident can devastate a growing fitness business. Say someone gets hurt during your class (trip-and-fall = general liability) or claims your instruction was negligent (professional liability). You need fitness liability insurance to cover the medical costs or legal fees. The best time to protect your business is now, before you get pushed to your financial limit.
Pro Tip:
Covering your fitness business can cost less than your monthly protein powder! Explore Fitness Instructor Insurance Costs.
Beauty Business: An Ugly Perm Situation
A hair stylist was performing a perm service on a regular client. Everything was looking beautiful when she accidentally flicked a perm rod, striking the client in the eye. The client later reported that her eye was still hurting, plus she was experiencing vision issues.
The Policy They Had: Beauty Professional Insurance
The Coverage That Helped: Professional Liability Insurance
Claim Payout Received: $45,000
✔️It’s easy to think, “My clients love me, they’d never sue me!” But when your services cause real damage, professional liability insurance steps in to make things right. Luckily, our policyholder had the coverage she needed to pay her client’s medical bills and continue helping her clients look their best.
Photography Business: The Not-So-Great Outdoors
A photographer travelled to Yosemite National Park for an engagement shoot. During setup, a sudden gust of wind toppled her tripod, sending her camera crashing onto the rocks. Her assistant captured the entire incident on her iPhone. The photographer’s lens was shattered, and the session had to be postponed.
The Policy They Had: Photographer Insurance
The Coverage That Helped: Inland Marine Insurance
Claim Payout Received: $2,822.55
✔️With inland marine coverage, our policyholder was able to replace her photography gear quickly and reschedule her clients’ shoot. Every business experiences hiccups, which is why it’s crucial to stay prepared against risks. Your clients’ next dream shot is counting on it!
Food Truck Business: Extra-Hot Pizza
A budding food business rented a pizza trailer for a local fair. Customers were raving about their slices, but unbeknownst to our policyholder, a sinister gas leak was cooking up danger. Mid-service, the leak ignited and caused a fire, destroying the trailer.
The Policy They Had: Food Truck Insurance
The Coverage That Helped: Commercial Auto Insurance
Claim Payout Received: $15,723
✔️Can you handle repair bills for expensive equipment on your own? If you have the right insurance, you won’t have to. Luckily, our policyholder had coverage for their rented food trailer under a commercial auto policy. They were able to handle the costs of damage, and their business didn’t burn out before they had a chance to make a profit.
CBD Business: Cybersecurity Stress
A cannabis e-commerce business discovered that attackers had injected malware into their sales platform, potentially exposing their customers’ data. While they weren’t sure if any personal information had been stolen, they launched an investigation and notified anyone who might have been affected.
The Policy They Had: CBD Business Insurance
The Coverage That Helped: Cyber Liability Insurance
Claim Payout Received: $53,060
✔️If your business faces a cybersecurity attack, it can get expensive to hire an IT team, plus notify and make things right with affected customers. Luckily, our policyholder had cyber liability insurance to send out a data breach notice and pay for credit monitoring to protect their customers’ personal information.
As a licensed insurance agent, I’ve heard my fair share of wild claims. What I’ve learned from all of these small business owners is that proactivity is your best defense against risk. You need business insurance, full stop.
How to Make Sure You’re Covered for These Risks
- Review your business and identify your unique risks
- Start an Insurance Canopy application
- Add optional coverages based on your needs
- Review regularly (every year or after any business changes)
- Keep a copy of your policy handy for easy access
Real Coverage, Designed for Real Entrepreneurs
All the hard work you put into your startup, the chance you took on yourself — it deserves to be protected. Insurance Canopy was made to support small businesses with coverage that’s top-rated, affordable, and tailored to your needs.
Buy your policy in the next eight minutes. Seriously, it’s that fast and easy. You never know! You might find your insurance story in our next roundup of real claims.
FAQs About Small Business Insurance Claims
How Do I File a Claim?
With Insurance Canopy, file a claim right through your online dashboard. It’s a quick and easy process. Learn more with our guide on how to file a claim.
What Should I Do First When an Incident Happens?
Get your documentation in order and file a claim ASAP. Our team will be in touch to walk you through the next steps.
If your claim involves another party, don’t admit fault. Just let them know you’re committed to resolving the issue and that your insurer will handle the claim.
Does General Liability Insurance Cover My Employees’ Injuries?
No, general liability covers injuries done to third parties (people other than your business or staff). To cover employee injuries, you need workers compensation insurance.
What’s a Typical Cyber Claim for a Small Business?
A typical cyber claim for small businesses is a data breach, when your online data is exposed. This includes theft of your client’s or customer’s sensitive information. Cyber liability insurance helps you recover if you experience a claim like this.
Kyle Jude | Program Manager
Kyle Jude is the Program Manager for Insurance Canopy. As a dedicated program manager with 10+ years of experience in the insurance industry, Kyle offers insight into different coverages for small business owners who are looking to navigate business liability insurance.
Kyle Jude is the Program Manager for Insurance Canopy. As a dedicated program manager with 10+ years of experience in the insurance industry, Kyle offers insight into different coverages for small business owners who are looking to navigate business liability insurance.
