Water leaks and frozen pipes are among the most common insurance claims for small-business owners, while fire claims are the costliest, according to an analysis of more than one million small-business property and liability policies by The Hartford, covering 2020 to 2024.
The analysis found that water and freezing damage accounted for roughly 22% of small-business claims over the five-year period, with an average cost of $34,600 per claim, ranking as the fourth most expensive type of claim. Fire claims, by comparison, averaged $80,000 in 2025, making them the top-ranked costliest claim, up from $35,000 in 2015 (about $47,600 adjusted for inflation).
Notable shifts in patterns
The Hartford’s 2025 analysis builds on a 2015 report, highlighting notable shifts in claim patterns over 10 years.
Water and freezing damage claims rose from 15% to 20%, while theft and burglary claims shifted in relative frequency. Vehicle accidents and reputational harm remain among the higher-cost claim types.
Claims involving slip-and-fall or customer injuries also increased in both frequency and cost over the past decade. Legal factors, including higher settlements and growing litigation, contributed to the rise in expense for these claims.
Wind and hail claims remained relatively stable at 15% of claims over the same period.
Tech to the rescue
The Hartford noted that emerging technologies, such as water sensors, video monitoring, and data analytics, can help small-business owners mitigate risk and prevent claims. The insurer also recommended practical measures including maintaining proper indoor temperatures during cold weather, securing property against theft, conducting roof and tree maintenance, and monitoring for slip-and-fall hazards.
Chris Jones, head of small business at The Hartford, said the company uses digital tools, analytics, and AI to help small businesses proactively manage risk and recover efficiently in the event of a claim.
The Hartford insures over one million small businesses, largely through its Spectrum Business Owner’s policy. The findings underscore the importance of proactive risk management for small-business owners, particularly for water damage, fire, and customer injury exposures, which together represent significant portions of claims frequency and cost.
