No matter what kind of business you run, accidents — big or small — can happen at any time. It could be a sudden fire, a break-in, or even a slip-and-fall, whether it’s on your premises or not. For small business owners who are already juggling a million things, managing the insurance claims process can feel overwhelming. And if you’re dealing with a major loss, getting back on your feet can be a huge burden. The whole claim process might seem like just one more thing to handle, especially if you’re not sure where to start.
There is light at the end of the tunnel. Understanding how to work through the business insurance claim process1 is a great place to start. This guide will help you understand the steps to filing a claim, offering advice to help you through each stage and get you back to doing what you do best.
Understanding Business Insurance Claims
A business insurance claim is the way to notify your insurance carrier of a potential loss after an unexpected event occurs. If approved, the claim lets you recover the costs of physical damage, legal liability, or business downtime that might put you in a financial bind.
I’ve been on both sides of the process as an insurance agent and small business owner. So, let me share the knowledge I’ve gathered throughout the years.
Common Types of Claims
There are any number of perils that might befall your business. For example, I had a client who owned a small grocery store. He turned his back on a customer before the guy bolted out the door with a valuable item the business owner kept on display. It was almost like the thief knew exactly what he was looking for. The perpetrator never got caught the grocer had a receipt and an appraisal, so the insurer reimbursed the owner the deductible.
Property Damage
These are losses that include fire, theft, vandalism, or natural disasters. They may occur on your own property, such as a warehouse or office space.
Liability Claims
These are situations where third-party injuries or property damage happen during your day-to-day business activities. For example, let’s say a client visits your office and slips, falls, and needs medical care. In this case, your liability policy can help cover or even pay for the full amount of those medical bills.
Business Interruption
Income loss can result from events that force your business to cease operations. If you have a windstorm that renders your facility without power for weeks, you’re almost certain to lose revenue. Business interruption insurance can help pay for overhead and other expenses while you’re getting back on your feet.
Key Policy Features to Know
Understand your business insurance policy and the business insurance claim process before anything calamitous happens. By being educated on the basics, you can act quickly and effectively when disaster strikes. Preparation minimizes delays, reduces stress, and maximizes your chances of a favorable outcome.
Filing a Business Insurance Claim
I always offer my clients two options: either report the claim and details directly to me or submit everything online whenever it’s convenient for them. Some of my clients are local nine-to-fivers, while others are always on the go. Those who travel a lot tend to prefer handling things on their own time, from anywhere, using just a mobile device and an internet connection. But no matter who files the claim or when, here are the basic steps to follow.
1. Assess the Damage or Incident
Start by making sure people are safe and property is reasonably protected from further damage. Once these protocols are established, document the damage or details of the incident. Take photos, make video logs, and write detailed accounts about the occurrence at hand. You might look at these recollections as evidence.
2. Notify Your Insurer
Contact your insurance carrier immediately. Many insurers require you notify them within a certain time frame. Give the carrier an overview of what has happened and be prepared to answer questions.
3. Gather Supporting Documents
Pull together all relevant documentation and make copies—digital or otherwise. This might include the following:
- Receipts and invoices for damaged property
- Repair estimates from contractors
- Police or other official incident reports
- Witness accounts fault or negligence
4. Work With an Adjuster
An insurance adjuster will likely be assigned to handle your claim. Be candid in your communications with them. Inform them about the occurrence, provide the evidence, and answer questions honestly.
5. Follow Up
Keep tabs on the situation each phase of the claim. If the process seems a bit slow, check with the carrier for updates. Frequent two-way communication allows the claim process to move forward and you must be an advocate for yourself.
6. Finalize and Receive Payment
If your claim gets approved, review the settlement offer. Make sure it meets your expectations and covers the losses incurred. Should you find anything amiss, address it before signing off and accepting payment or reimbursement.
Tips for Streamlining the Claims Process
In order to really make sure you’re ready to go and confident with the claims filing process, there are a few additional steps you can take:
Be Prepared
At least annually, review your insurance policies to keep pace with changes or growth in your business. Perform frequent safety inspections and stay compliant with specific industry regulations to reduce your risk of a claim.
Document Everything
Keep organized records of your business assets, including updated inventory lists and property valuations. Store these details in digital form so you can quickly access them in one convenient place.
Work With a Trusted Broker
An experienced insurance broker can help you better understand your policy. They should represent your best interests and help navigate complicated claims situations.
Act Quickly
Pay attention to those time frames mentioned. Delays in reporting a claim or submitting documents can make the process difficult. To keep the process on track, comply with your claims adjuster when required.
Understand Common Pitfalls
Recovering from a disaster can be exhausting but resolving business insurance claims shouldn’t need to be. By understanding your policy and its coverages along with staying focused, you can cut a clear path to normal operations and financial stability.
Prevention them—and that foresight can get you back to business as usual.
- https://www.iii.org/article/filing-a-business-insurance-claim ↩︎