Accidents, bad weather, fire, crime, injury, property damage and many other risks are faced by the business owner every day. Business insurance is used to manage those risks. Making a business insurance claim can be a daunting task. Often a business can go for years without making any claims. Then, when the need arises, business owners and managers may not know what to do. Here we look at how to file a business insurance claim.
Making a business insurance claim involves three steps:
- Following Up
Planning ahead is critical to proper risk management. Business owners should have a disaster plan in place. Employees need to be trained in proper reporting procedures. The business owner should consider some of the following planning tips:
- Cameras- Digital cameras are the best way of recording a claim. A picture is worth well over a thousand words when submitting a claim. Put digital cameras in all vehicles (make sure they are charged!). Have cameras available to clerks, managers, foreman, and shipping & receiving in a central location with someone given responsibility to maintain the cameras. Consider surveillance cameras that keep digital records for at least thirty days. Instruct employees to photograph everything that occurs in an event that may become a claim.
- Uniform Written Report Forms- Use uniform written reports or incident reports. Have the forms available and instruct employees how to use the forms.
- Mock Drills- Consider staging mock disaster drills. Similar to fire drills held at schools.
- Regulatory Compliance- In most cases, if the business owner complies with safety regulations imposed by state or federal agencies, then most disaster planning and recording comes about by virtue of regulatory compliance.
Report incidents such as fires, accidents, thefts, weather damage, third-party injuries immediately. Failing to timely report may void any available business insurance coverage.
- Report to Law Enforcement and Authorities- Law enforcement and the proper authorities should be contacted first and all requisite reports such as a police report should be prepared. Contact numbers should be on readily accessible emergency contact numbers throughout the business.
- Contact Your Insurance Professional- Your insurance professional whether an agent or broker will walk you through filing a claim. The insurance professional will typically take down cursory information and prepare an ACCORD claim form. This form is sent to the insurer. Ask your insurance professional about all relevant time lines, contact numbers and what information is needed.
- Contact Your Insurer- Once the claim form reaches the insurer it is assigned to an adjuster. Adjusters may be in house or may be independent. This assignment takes place very quickly and the business owner should strive to make contact with the insurer through the adjuster within 48 to 72 hours. The adjuster will want evidence of the claim. Here is where photos help because they can be sent to the adjuster immediately especially if they are digital.
- Contact Professionals to Assess and Repair Damage- Too many businesses wait on critical repairs. In most cases, immediate repairs to keep the business operational and safe can be made immediately without the "permission" of the insurer. Get estimates on the damage as quickly as possible. Try to get two to three estimates from reputable sources. Keep all parts and damaged items. The insurer will want to see proof of repairs and damaged property.
- Contact Competent Legal Counsel- Consider having competent legal counsel prepare a claims package to present to your insurer. Lawyers who work with insurers everyday know what insurers look for and know how to make an adjuster's job easy. The investment in legal counsel at the beginning of the claim will be repaid if the claim becomes a disputed claim.
- Contact Competent Accounting Assistance- If your claim will involve a loss of income or business interruption claim, consider the retention of a forensic accountant from the start of the claim to handle presentment of the loss to the insurer.
When contacting the insurance professional and insurer, set specific times to complete tasks. Keep to the deadlines and follow up with the adjuster on the progress of the claim. Demand that your insurance professional take an active role in claims resolution. Failing to follow up when asked will delay the claim.