Business Insurance Claims: Common Types & How to File

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Reviewed by Jeffrey Green

Jeff Green has held a variety of sales and management roles at life insurance companies, Wall street firms, and distribution organizations over his 40-year career. He was previously Finra 7,24,66 registered and held life insurance licenses in multiple states. He is a graduate of Stony Brook University.

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Setting up a business involves tremendous amounts of time and money. Over the years, your company may accumulate a large workforce and valuable assets in the form of machinery, stock and buildings.

All these are vital for productivity and are therefore protected by business insurance. When it comes to filing a business insurance claim, where do you begin?

If you work with an independent insurance agent, you can start by calling your agent, who will help you through the entire claims process.

If you are seeking a new business policy that will help you recover from accidents, injuries and other business risks, an agent specializing in commercial insurance can help. Find an independent insurance agent near you to secure your assets and get peace of mind.

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Most Common Business Insurance Claims

• Burglary and theft
• Water damage
• Customer injuries
• Reputational damage
• Product liability

When Should You File a Business Insurance Claim?

It is important that you file business insurance claims immediately after an incident occurs. Any delay in filing a claim with your insurance company can delay the claims process and the time it takes to receive funds.

You should comprehensively report the damage to your own business property as well as damage to any third-party assets in the incident. If you work with an agent, you will be in good hands. Your agent will help you to navigate the claims process as quickly and painlessly as possible.

Here are some guidelines on how to systematically file claims for damage to your business assets.

• Assess the situation and contact emergency services: It probably goes without saying, but be sure to call for emergency services if there is severe damage, someone is injured, or if there is an ongoing hazard. Complete the required police reports and be sure to retain a copy of any reports for your own records and for your insurance company.
• Contact your insurance agent: Provide all details of the incident to your insurance agent, including any data that will support your claim. The records you provide could be anything from the findings of a forensic accountant to documentation of cybercrimes or pictures of an on-the-job accident. Your agent will assist you with any paperwork that needs to be completed to start the claims process.
• Work with the adjuster: The insurance company will assign an insurance adjuster to your claim. The adjuster is responsible for verifying damage and providing guidance as you proceed. In the event of a small claim, your adjuster may settle the claim at the time of a visit to your worksite. For a large claim, such as a workplace fire, a severe worker injury, cybercrimes, fraud or embezzlement, typically an investigative process will be required to gather all of the pertinent information before the insurance company can settle the claim.

Important Safety Measures to Prevent Loss

The security and safety of your business can prevent many business insurance claims in the first place. Make sure you have safety protocols in place and clearly communicate these to your employees.

Safety protocols should include everything your employees do that can put them or your business property at risk, including:

• Handling company funds
• Accessing and managing company data, documents and intellectual property
• Handling food and working in food prep areas
• Driving company cars, commercial vehicles or trucks
• Handling heavy equipment or supplies
• Using ladders, equipment and machinery

In many cases, workplace safety training and occupational hazard awareness can help to make your workplace safer and reduce the likelihood of loss, damage and liability claims that can affect your business assets.

Here are a few tips for managing risk at your place of business.

• Install CCTV cameras: Security cameras can help document the routine events of your business and help to prevent burglary and business fraud. Be sure to notify your insurance agent if you do install a security system, since you may be able to get a discount on your business coverage.
• Use a standardized reporting system: Have a standardized system that staff members can use to report any on-the-job incidents. Train your employees on the importance of good documentation and timely reporting.
• Practice an evacuation plan: Have an evacuation plan designed for all of your buildings and conduct mock drills to prepare your staff for fires and other disasters.
• Follow regulations: Make sure that your business follows all state and federal regulations that apply to your business type. Many of the best practice risk management methods are covered by state legal requirements and safety requirements.

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Important Considerations When Filing Business Insurance Claims

The time it takes to settle an insurance claim on your commercial insurance policy depends on the severity of the loss and the associated financial compensation you receive.

You may need a follow-up strategy if the extent of damage is major and the estimated time it will take to reach a settlement is significant. When you do have a business loss, the following are some things to think about.

1. Your loss management team: In the event of a large claim, consider hiring a professional loss specialist. You can think of these specialists as adjusters from your side. Although all their reports will be rechecked and verified by the insurer’s adjuster, you can rest easy knowing that your own team prepared them. In addition to a loss specialist, consider hiring a legal expert to guide your team through laws and policies.
2. Business interruption: Interruption of business is a major concern in large claims. The time that passes during the loss adjustment process is not usually considered in the compensation. The considerable amount of time to resolve large claims can cause significant financial loss if a business is not financially prepared for down time.
3. Forensic accounting: Your adjuster may propose that an accountant review your loss and any related events that may affect your claim. Consider hiring a forensic accounting firm to put together the claim. The firm’s accountants will work with your accounting department and file the claim for you.

Frequently Asked Questions About Business Insurance Claims

How Do I File A Business Insurance Claim?

The first step is the easiest: Get ahold of your insurer. Most companies make it pretty simple to do so, by:

• Calling the insurance company by phone
• Logging into your account online
• Contacting your insurance agent

And when you’re ready, make sure you have the following info handy:

• Your policy number
• The date and location of the incident
• Your contact information and information about all others involved
• A description of the incident
• Other details as requested by your insurance company

Your insurance company will review your request, evaluate the damage, and determine how much compensation is owed to your company. In some cases, the insurance adjuster will be able to cut a check on-site after reviewing the damage. But for larger, more complex claims, payment processing may take a bit longer.

What If My Business Is Sued in a Liability Lawsuit?

First off, you should notify your insurance company right away. Your insurer will then take a close-up look at your coverage and determine whether you have the right liability insurance to cover against the suit.

If you do, your insurance company will begin an in-depth investigation into the claim and pair you up with some proper legal counsel. Then your attorney will work to settle the dispute in a way that pleases everyone.

What If an Employee Is Injured at Work?

Your immediate priority is the care of the injured employee. If medical attention is required, they should be transported to the nearest emergency room. Make sure you properly document the whole incident, too—when, where, why, what, who and anything else you can think of.

Any follow-up treatment, or initial treatment if the incident was only a minor, non-threatening injury, should be handled within the network of medical providers listed by your workers’ compensation insurance policy.

When you file a claim, you will need to provide your insurance company with:

• The injured employee’s name, contact information and wage information
• A written statement documenting how they were injured
• Witness statements and accident scene information
• The name(s) of any medical provider(s) who treated the injury
• Photographs of the object that caused the injury, if applicable

Your workers' compensation insurance company will then work with you and your employee to handle any ongoing treatment needs for the injury.

How Are Replacement Values Determined in Property Damage Claims?

When you file a property damage claim, your compensation depends on whether your policy provides for replacement cost value (RCV) or actual cash value (ACV).

If you have an RCV policy, you will be reimbursed in one of two ways. The first is for the cost of replacing damaged/destroyed property with a new item of the same kind and quality.

The other is for the cost to repair the property to its original quality. It all comes down to which option the adjuster feels is most appropriate, given the damage.

But if you have an ACV policy, your adjuster will first determine if the property can be repaired. If so, you will be compensated for the cost to get it back to where it was before the incident.

If not, your insurer will consider the original cost of the property and subtract a bit for deterioration/depreciation to determine its actual worth. And that is the amount you will be compensated.

When you have concerns about your business coverage, such as whether it will be adequate to meet your needs at the time of a claim, contact a local independent agent who specializes in commercial insurance.

Choosing an independent agent means you will have an advocate who will take the time to get to know your business and review all of your coverage needs. Best of all, because these agents work with multiple insurance companies, your local agent can meet each of your coverage needs out of one office.

Contact a local independent insurance agent today to get personalized assistance.