Mistakes Business Owners Make Filing Insurance Claims

Andrew Jeffers | April 17, 2018

What do you rely on when disaster strikes your business?

Like most small business owners, you probably rely on your insurance claims.

Whether we’re talking about water or wind damage, fire or theft, you might turn to your insurance provider for assistance, right?

But sometimes, mistakes can be made that may delay insurance reimbursement or deny coverage at all. Which is why it’s so important to be aware of the common mistakes business owners like yourself make when filing insurance claims.

Let’s begin…

To file or not to file

There are several things you need to consider before filing your claim… or not filing.

After all, that's why business owners purchase commercial insurance in the first place, right? That is true, however, the final answer to that question can vary among companies. It generally all comes down to:

the business owner's claim history
the deductible - the amount he or she agrees to pay towards a claim
the amount of harm the business suffers during the event

Go ahead and file your claim if…

When trying to figure out whether insurance will cover your losses or not, you can take into account the following conditions:

the need to make the business whole again after a covered event
temporarily ceasing business operations or relocating for repairs
having a liability claim that needs to be filed as soon as possible

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Part of the decision on whether or not to file a commercial insurance claim rests with the type of claim. In other words, it’s all about the potential loss that comes into play. If your business suffers huge losses, then you’ll be more likely to file insurance claims.

On the other hand, if you’re dealing with a situation that doesn’t exceed your deductible, you’ll be less inclined to file claims.

Tip: It’s better to set deductibles as high as possible, because the lower the deductible, the larger the premium and vice versa.

Other reasons that require caution when filing insurance claims include the following:

company owners are not guaranteed premium increases
the claim history can follow the business for up to seven years even if you’re switching to a different provider
water damage claims can cause providers to drop the policy

Common mistakes to avoid when filing insurance claims

Below are some of the most frequent mistakes business owners like yourself make in filing insurance claims, so here are a few things to avoid:

Late notifications. Cleaning up damage before an insurance representative visits the business is detrimental for two main reasons:
first, physical evidence is easier to adjust
second, timely notice is a condition of coverage in most business insurance policies
Poor documentation. The idea is to document every communication you have with your insurer regarding your claim. This means time, date, physical copies, emails and photos of your damaged property as well.
Removing damaged property. It’s important not to throw away damaged materials as they are all evidence of the impact of the disaster on your business. At the same time, making temporary repairs to keep the damage from worsening is essential to the outcome of your claim.
Not calling the police. A lot of commercial property policies obligate you to contact the police if a law has been broken. The good news is that a police report can help speed up the settlement of your claim.
Not doing your own math. Relying solely on your insurer's estimates may cost you an extra buck. Consider hiring a public adjuster to assist you in calculating your repairs or replacement costs.
Taking the blame. Admitting liability when an accident occurs could impair your insurer's ability to defend you against the claim. In other words, you could be denied coverage for the claim. It’s best not to assume any obligations without the insurer's consent.
Not reading your policy. Understanding what exactly your policy covers and what it doesn’t is crucial to receiving the right type of coverage for your business.

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Don’t make the same mistakes when you file insurance claims

I can help you review your policy and guide you through the claims process, so that you can get the best coverage for your business. Let’s get in touch today!