Commercial Insurance Claims: 10 Tips For A Successful Claim
Commercial insurance claims are complicated. They can also make or break your business.
A single commercial insurance claim could be the difference between the success and failure of your business. In fact, many businesses have gone under because of unsuccessful commercial insurance claims.
Maybe you’re currently dealing with a commercial insurance claim. Maybe you’re preparing your business for unexpected events. Whatever the situation may be, here are the best tips for filing a successful commercial insurance claim.
Read Your Policy and Understand Your Coverage
You buy insurance to protect your business. Unfortunately, many business owners don’t fully understand their policy or what it covers.
You should be an expert on your commercial insurance policy. Read your policy carefully. Check for exclusions.
Many business owners are surprised to discover their policy doesn’t cover flood damage, for example. Like home insurance, commercial insurance does not cover flood damage. If your business is in a flood-prone area, then you may not receive compensation for flood damage.
Commercial insurance policies can be complicated and filled with jargon, unfamiliar terms, and legalese. Check your policy to understand your coverage. Ideally, you’ll do this long before dealing with a claim.
Maintain Good Paperwork & Documentation
The easiest commercial insurance claims are for businesses with good paperwork and clear documentation.
If you file a business interruption claim, for example, then your insurer needs to know how much business you’re losing for each day. If you can’t provide evidence, then your insurer is likely to give you the lowest possible amount of compensation.
Keep thorough records for your business for things like:
- Customer numbers
- Sales and revenue
- Fixed costs
- Inventory
Don’t forget to back up this information in more than one location. Many business owners keep thorough records, only to lose those records to fire or water damage, complicating claims significantly.
Keep Thorough Records After a Loss
If your business just experienced a loss, then you need to keep thorough records after that loss.
Keep track of all extra costs incurred by your business as a result of that loss. Monitor how much the loss has affected your business in terms of customers, sales, and revenue. Keep receipts and maintain other paperwork to provide supporting evidence. Track how much you spent on emergency supplies and other mitigation efforts.
You buy commercial insurance to protect your business from unexpected events. If your business has experienced an unexpected event, then you need to keep thorough documentation to maximize the value of your claim and receive every penny owed to you by your insurer.
Notify Your Insurer As Soon As Reasonably Possible
Your insurer needs to know of the loss as soon as reasonably possible. Some commercial policies have specific timeframe requirements. Or, state insurance laws may require you to notify your insurer of the loss within a specific period.
The sooner you contact your insurer about the loss, the less likely you are to experience complications.
Pay Attention to Claim-Related Timelines
You must notify your insurer of a loss within a certain timeframe. However, you must also deal with your insurance company’s requests within a certain timeframe. If you miss a deadline, you may not receive compensation.
Your insurance company’s adjuster may require you to sign a sworn proof of loss document with information about your claim, for example. Typically, you must sign and return this document within 60 days.
The days following a catastrophic incident can be hectic. However, pay attention to timeframes and deadlines to avoid future insurance headaches.
Take Steps to Protect Your Business from Further Damage
Your insurance policy generally requires you to take steps to protect your business from future damage, if safe to do so.
Make temporary repairs to your business after a loss. Place a tarp over an exposed area of your roof, for example, to protect your business from further water damage due to rain. Your commercial policy may cover the initial damage – like the hole in your roof from the hurricane. But your insurer could deny additional resulting damage to your business because you failed to take adequate action.
Keep receipts for any temporary repairs you make to your property. Your insurer should reimburse you for those temporary repairs (and deduct those repair costs from your total settlement amount)
Get Quotes from Multiple Contractors
Don’t trust the future of your business to the first contractor you see. You don’t need to use your insurer’s recommended contractor. Instead, you can use any contractor you like. In certain circumstances, using the insurance company’s preferred vendor may offer you additional protection though.
You can reach out to a Public Adjuster to get a better idea of how much it really costs to repair your business after a loss.
Document the Damage to Speed Up the Claim
Like a home insurance claim, a commercial insurance claim goes faster when you have plenty of documented evidence of the loss.
Avoid throwing away damaged inventory until you thoroughly document it – or your insurance company sees the damage.
Take photos and videos of all damaged property. The more evidence you have, and the more thorough you are with collecting this evidence, the easier your claim will be. If you don’t show actual damage in your photos and you discard the item, it is likely that the replacement of the item will be denied.
In many cases, a single photograph of a damaged item can make the difference between a successful commercial insurance claim or a disappointing claim.
Avoid Common Mistakes
Many business owners make mistakes when dealing with a commercial insurance claim.
Some of the most common mistakes business owners make include:
- Carrying a commercial insurance policy they don’t understand. Business owners should review coverage regularly to avoid any surprises on future claims. If you are unable to decipher the actual coverages, then reach out to a Public Adjuster and see if they will review your policy coverages with you.
- Throwing away damaged property before documenting them.
- Admitting they were at fault to a customer or anyone else. Admitting fault could be a breach of your insurance contract, and your insurer may deny your claim or cancel coverage if you admit fault.
- Notify your insurer of the loss within an appropriate length of time. Most insurers want to know of the loss as soon as reasonably possible, and some policies have specific timeframe requirements.
- Letting insurers take advantage of their unfamiliarity with claims and coverage. At the first sign of missed deadlines, incorrect payments or misleading information, reach out to a Public Adjuster to make sure you are headed in the right direction.
Consider Hiring a Licensed Public Adjuster to Manage Disputes
Most business owners aren’t insurance experts. Most only ever deal with one or two large claims. This can make it difficult to negotiate with your insurance company.
In cases with a large disputed amount (say, over $10,000), it may be in your best interest to hire a professional – like a licensed public adjuster – to handle your claim. Licensed public adjusters are insurance industry professionals who:
- Review your commercial insurance claim
- Evaluate your policy
- Represent your best interests – not your insurer’s bottom line
- Calculate the amount rightfully owed to you by your insurer
- Negotiate with your insurer on your behalf
- Achieve an optimal settlement in your favor
In many cases, licensed public adjusters have increased business insurance payouts by 200% to 300%. Others have overturned denied claims, helping businesses get millions of dollars in compensation.
Because of all of these benefits, it may be in your best interest to hire a licensed public adjuster for your commercial insurance claim.
Final Word
Don’t let greedy insurance companies take advantage of your business. You paid for commercial insurance, and you’re rightfully owed compensation.
Schedule a free consultation with a ClaimsMate public adjuster today to evaluate your insurance claim.
Stephanie is a property insurance claim expert with over 20 years of experience working as an insurance adjuster, expert witness, appraiser and umpire. She is passionate about sharing her expertise, knowledge, tips and training to help both property owners and Public Adjusters in their pursuit of effectively managing claims and recovering the claim settlement they deserve after a loss.
