Filing an insurance claim can be a stressful decision for any business owner. One of the most common concerns we hear is:
“Will filing a claim increase my business’s insurance premiums?”
The short answer is:
It might—but it depends on several key factors. In this post, we’ll break down the three main things that influence how a claim can impact your future premiums and what you should consider before filing.
1. Claim Frequency and Severity Matter
Insurance companies carefully evaluate
both the number of claims you file and the
size of those claims when determining your renewal premiums.
- Frequent Claims: If your business files multiple claims in a short time, it signals a higher level of risk. Insurers may respond by raising your rates—or even choosing not to renew your policy.
- Severe or High-Dollar Claims: One large loss, especially if it’s the result of a liability or property issue, can also trigger a premium increase.
Think of it this way: insurance companies are in the business of managing risk. If your business starts to look riskier on paper, they’ll likely charge more to insure you.
2. The Type of Claim You File Makes a Difference
Not all claims are treated equally.
- Minor Auto Claims: Something like a fender bender in a commercial auto policy may have a minimal impact—especially if your business has a good track record.
- Large Liability Claims: These tend to be viewed more seriously. If someone sues your business or there’s a major injury involved, that claim could have a bigger impact on your future premiums.
Different lines of coverage—like general liability, workers’ compensation, or commercial property insurance—can all be affected differently depending on the nature of the claim.
3. Some Insurers Are More Forgiving Than Others
Here’s some good news: if this is your first claim in a while, and it’s minor, some insurance companies may
not raise your premiums right away.
Many insurers understand that claims happen, and they may offer leniency to businesses with a long history of low or no claims. But this varies from company to company and also depends on your
industry class,
business size, and
loss history.
That said, if additional claims occur in the future, especially over a short period, you should expect to see adjustments at renewal.
Should You File the Claim?
Before filing a claim, ask yourself:
- Is the cost of the loss more than your deductible?
- Could the potential increase in premiums outweigh the benefit of the claim?
- Is the claim related to minor property damage, or does it involve a more serious situation like a liability issue?
- Do you have a strong history with your current insurer that might work in your favor?
It’s worth discussing your specific situation with your insurance agent before making a final
decision.
When You Should Almost Always File a Claim
While some smaller claims might be worth paying out of pocket to avoid premium increases, there are certain situations where
you should almost always file the claim immediately—especially if it involves a
third-party injury or liability.
For example:
- A customer slips and falls in your store
- A delivery driver hits another vehicle and the other driver is injured
- Your employee accidentally damages someone else’s property
These types of claims can start out small but escalate quickly—especially if legal action is involved or medical bills begin to pile up. If you try to handle it out of pocket and it grows beyond what you expected, you may lose your right to have the insurance company step in.
💡 Bottom line: If there’s any chance the claim could involve injuries to others or future legal complications, file the claim and let your insurance company handle it.
Final Thoughts
Filing an insurance claim can lead to higher premiums for your business, but not always. The impact depends on the frequency, severity, and type of claim—as well as the insurer’s underwriting policies and current market conditions.
If you’re unsure whether to file a claim or want help reviewing your current coverage:
📞
We’re here to help. Contact us today for a personalized insurance review.
