Commercial Insurance Claims vs. Homeowners Insurance Claims: What’s the Difference?

Today, we’re highlighting some of the most important differences between commercial insurance claims and homeowners insurance claims.

Both Commercial & Homeowners Insurance Protect Against Similar Things

People buy homeowners and commercial insurance policies with a similar goal: to protect against unexpected events.

Both business and homeowners insurance policies, for example, could protect against things like:

• Fire, water, and wind damage
• Theft and vandalism
• Liability for injuries or damages to other people and property
• Other damages caused by unexpected events

Commercial Insurance is More Complex & Customized to the Business

Generally, commercial insurance policies are more complex than homeowners insurance policies.

Homeowners insurance policies are more “one size fits all.” Homes and needs may be different, but the big elements are similar.

Commercial insurance policies, meanwhile, tend to be customized to the business. Businesses may operate in different industries and have completely different needs.

Many small businesses have business owners policies (BOPs), which contain a standard range of coverages – like liability coverage and property damage coverage. These policies may be similar even when covering different types of businesses – but BOPs still tend to be more complex than homeowners insurance policies.

Commercial Insurance Policies May Have Unclear Policyholders

A typical homeowners insurance policy lists one or more individuals: like the individual or couple who own the home. Homeowners are trying to protect the property they own, and their rights and responsibilities for that property are obvious.

Commercial policies, meanwhile, may be less clear about the policyholder. The policyholder could be:

• An individual
• A group or organization
• Any other entity responsible for the business

Because the policyholder is unclear, commercial claims can be complicated. The insurer may need to contact an organization to manage the claim, negotiate the settlement, and set up payout, for example.

Commercial Policies Could Have Multiple Businesses or Locations Under One Plan

A single commercial policy could cover multiple locations.

In comparison, a homeowners insurance policy only covers one property – like a house and any garages or sheds on that property.

When a business has multiple locations with similar insurance needs, a commercial insurance provider may be willing to group multiple businesses under a single policy.

Sometimes, this can simplify claims because you’re dealing with one policy and one insurer. In other cases, it can complicate them, as different locations may have slightly different insurance needs, causing coverage to be applied in different ways.

Both Commercial & Homeowners Insurance Policies Require Extensive Documentation

Whether you’re dealing with a homeowners insurance claim or a commercial insurance claim, you’ll be expected to provide ample documentation to verify your claim.

Businesses may need to provide statements proving the previous year’s total revenue, for example, to qualify for a business interruption claim. Insurers calculate your average revenue over the last year, then provide compensation.

For property damage claims, both commercial and residential insurers require documentation, photos, and videos proving the damage occurred and verifying the value of the damaged items.

The more costly a claim is, the more documentation your insurer will require.

Commercial Plans Have Specialized Coverages Not Available to Homeowners

Homeowners and business owners have different needs. Unsurprisingly, commercial insurance plans have specialized coverages not found on ordinary homeowners insurance policies.

Some of the specialized coverages available to a business include:

• Commercial liability coverage, which tends to have higher limits and greater coverage than homeowners insurance liability coverage. Commercial liability coverage may protect employees and customers from falls and other damages, for example – similar to a homeowners insurance policy. However, it could also protect the business from liability over defective products or services.
• Business interruption coverage, which covers losses incurred by the business if the business is forced to close – like lost income, staff wages, relocation costs, and other expenses. Homeowners insurance does not have an equivalent to business interruption coverage.
• Commercial auto insurance coverage, which protects one or more vehicles belonging to the business. This policy could also extend to employees’ personal vehicles, assuming they drive those vehicles for work purposes.

Commercial Insurance Prices Vary Widely

Homeowners insurance policies vary in price. However, people in the same neighborhood tend to pay roughly similar prices for home insurance, assuming coverage and square footage are equal.

That’s not always the case with commercial insurance, where businesses could pay wildly different rates.

Insurance is all about risk, and insurers charge different rates based on perceived risk:

• Some businesses, like bars and restaurants, have more customers on-site than other businesses, like law firms. The more customers are on-site, the greater the risk of customer injuries may be.
• Some types of businesses are subject to local building ordinances – like a restaurant that must meet city health code requirements.
• Some businesses have millions of dollars’ worth of equipment on-site, while others do not.
• Some businesses have multiple buildings or facilities with different functions – like a brewery with a restaurant space and a brewing space.

Because of these varying risk factors, commercial insurance providers don’t offer standardized plans; instead, they custom-build each commercial plan based on the business’s needs and risk factors.

Public Adjusters Can Help with Both Commercial & Residential Claims

Public adjusters are insurance industry professionals who help with insurance claims.

Some public adjusters specialize in homeowners insurance claims, while others specialize in commercial claims. Some work in both fields.

Some of the ways public adjusters help with both commercial and residential claims include:

• Negotiating with your insurer on your behalf to obtain the best possible outcome.
• Organizing your claim documentation and paperwork to ensure it presents the best possible case for your business.
• Overseeing repairs and replacements to ensure your property is being restored to pre-loss condition, per the terms of your contract.
• Reviewing your claim at every step to ensure you’re not missing damage or leaving money on the table.
• Increasing payout by 300% or more, helping you get the money you deserve for your home or business insurance claim.

Final Word: Hire a Public Adjuster for Complicated Commercial Claims

Commercial insurance and residential insurance policies protect against similar things: unexpected damages and other risks. However, they protect against risk in different ways.

Commercial claims can get complicated. ClaimsMate can help decipher your policy, apply it to your claim effectively, and ensure your business gets every penny owed.

Contact ClaimsMate today for a no-cost consultation with a public adjuster specializing in commercial insurance claims.

Stephanie Corona

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.