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What You Need to Know About Filing a Business Insurance Claim

Do you know what to do when your business suffers a property damage or loss?

Are you aware of your business insurance claim and how to make use of it?

What steps should you take when you record a property or casualty damage in the course of your business activity?

A lot of business owners who purchased insurance coverage for their businesses actually do not know what to do when they suffer damages or incur losses. 

Statistics show that businesses lost $43.58 million dollars in 2018 due to fire outbreaks alone. Fire outbreaks are not the only source of loss as we know today. Businesses suffer losses from natural disasters, theft, cyber-attacks and so on.

Business insurance makes you entitled to relief if your business suffers any form of loss. This is the essence of business insurance coverage.

For clarity, let me explain what a business insurance is.

What is Business Insurance?

Business insurance is an insurance policy which pays a business some compensation when the business suffers damage in its property, a loss of inventory, or when someone gets injured on the business’s premise.

The business insurance policy protects the business from property and casualty damages and it helps businesses recover from the effect of this kind of damage.

If your business suffers a loss during the course of activity and you have already acquired business insurance, what you do is to file a business insurance claim.

So long you have paid the deductibles you resolved with the insurance policy provider and you have been confirmed to be eligible to receive payments from their end.

In the event of any damage or loss to your property or casualty, as you go about your business, a business insurance claim should be filed.

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What is a Business Insurance Claim?

A business insurance claim is simply a request an insurance policyholder makes to an insurance policy provider after a loss is incurred.

This request is made only when the loss incurred was stipulated to be covered by the business insurance policy. That is, you must find it stated that the policy covers for that specific loss else no claim can be filed on it.

A business owner who is a business insurance policyholder makes a request to their insurance provider after a loss or when a covered circumstance occurs. This request is a business insurance claim.

Basically, when you file a business insurance claim two things happen: 

  1. The policyholder proves that a covered event actually took place.
  2. The insurance policy provider investigates the records of authenticity from the policyholder.

After investigation, if the event really took place, the insurance policy provider will pay the policyholder’s expenses but that is to the limit stipulated in the policy.

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How to File a Business Insurance Claim

It is one thing to have business insurance coverage and it is another thing to get compensated suffering a loss. Your business may be covered by an insurance policy and even when it suffers a loss your expenses would never be paid for.

This is because a business insurance claim must be filed and most importantly it must be filed correctly.

4 Steps to File a Business Insurance Claim

1. Keep Records of the Damages 

The business insurance policy pays for damages therefore a claim can only be made when your business suffers damage or property loss.

Insurance providers will request proof of damages when you file an insurance claim. They would use this and other information to be sure the event took place before they pay any compensation.

The business owner is now saddled with the responsibility of proving the damages actually occurred and they can only do so by presenting records of the damages.

Unfortunately, pictures and police reports will not always be sufficient proof that damage occurred. The business owner should have records of the business before the incident took place for proper liability documenting.

In filing a business insurance claim, a business owner should also take pictures and even videos of third-party injuries and property damage.

All of these are important because you may need to fix some repairs urgently to facilitate the continuation of your business activities before a claim is resolved. The pictures and videos will serve as evidence there was an initial loss.

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2. Prevent Further Damages 

There is a tendency to record more damages after initial damage this may be due to the awareness of an insurance cover. That should not be.

One of the provisions in a business insurance policy is that the policyholder must take steps to prevent further damages to their own property. This is because the policy provider will not account for damages after the initial loss and definitely will not pay for them.

The moment all the records of the initial loss have been documented properly, business owners should take steps and implement modalities to stop further damages.

They can take care of repairs necessary for the continuation of their business while they wait for their claims to be filed and attended to.

3. Record Repairs Made 

Every repair made by the business owner should be well recorded and receipts must be kept properly. These will stand as proof that the business actually suffered a loss. Certain insurance policies may cover such costs.

Also, the business owner should get an estimate of what a complete repair will cost before filing an insurance claim.

4. Evaluate the Provisions of Your Insurance Policy 

To be sure your insurance policy covers for the loss you just suffered you will need to evaluate the provisions of your policy checking if it covers the loss specifically.

In a typical policy, there would be a section where an outline of the damages and events that warrants an insurance claim to be filed. 

This is important not only for business owners to know the provisions in their insurance policy but to know the steps they should take after a loss. As outlined in most policy insurances, prompt notice to their insurance policy of loss is required after a loss.

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5. File Your Claim 

After completing the evaluation of the provisions of the insurance policy, policyholders should file their business insurance claims. Most times, it is not given to the policyholder to file the claims themselves.

It is best to contact an insurance broker to give you advice on when and how to file a business claim.

Quintessentially, an insurance broker should be part of every process involved in filing a business insurance claim. Nevertheless, these points can guide your decision to file a business insurance claim.

The next question is: at what stage should an entrepreneur file a business insurance claim?

When to File a Business Insurance Claim

You can file a business insurance claim when: 

  1. Your business suffers losses you can not pay for.
  2. Your business activities are suspended temporarily or permanently due to events covered by the insurance policy.
  3. You have fully paid the aggregate deductibles. 
  4. A liability lawsuit is filed against your business.

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If your business meets all the following conditions which an insurance broker can help you verify, then you are good to go. Your claim can be filed to your insurance policy provider which is as easy as calling a representative from the insurance company.

Or you can save yourself the stress by allowing your insurance broker to help you file a business insurance claim.

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