Filing a small business insurance claim after an accident or loss might sound easy, but it has some rules to go by, like filing it immediately, submitting the proof, etc. To help you file your claims easily, we have discussed some common mistakes that small business owners make when filing claims so that you can avoid them in the future.
Not Informing Their Insurer Immediately
Mostly, business owners delay contacting their insurance provider after an accident, creating uncertainties about the incident and the related damages. You have to contact your insurer right after the incident so that it’s easier for you to explain the incident and its cause. Also, filing claims earlier will help you make adjustments easily.
Being Unaware of the Policy
It is common to assume that a commercial insurance policy will cover businesses against every natural disaster, including earthquakes, floods, etc. However, a standard commercial insurance policy doesn’t cover damages resulting from earthquakes and floods. You have to buy standalone insurance or additional endorsements to cover such things.
Failing to Document the Damage
While filing claims, you must submit proof of the damages and loss, so make sure to photograph the accident/damage area, covering all the damaged utensils, equipment, inventories, etc. This will help validate the damage while minimizing the chances of claims denial.
Besides these, ensure to:
- Record the date, time, and substance of verbal conversations with a claims representative on the phone
- Ask them to provide a summary of your conversation in an email or transcript and retain these copies
- Create a separate folder for all your email conversations
These documents will also serve as proof of damage when filing claims.
When Should You Consider Filing the Claim?
Filing a claim immediately is a must to prevent coverage denials, but it does not mean you have to file it without considering other factors.
Before filing the claim, ensure to review your:
- Insurance policy (concerning what is covered and what is not)
- Deductible amounts (whether or not you can afford that)
- Total loss from the damage
These things will help determine whether or not filing the claim is beneficial.
Generally, you should:
- File claims only for costly damages.
- Avoid filing claims for small replacements or repairs that are affordable by your business.
This will help lower your premiums and save your coverage for greater damages that may occur in the future.
Common Coverages That a Small Business Owners Must Have
- General liability – Pays for third-party property damage and bodily injury.
- Business income – Replaces lost income if you can’t resume your operations temporarily after a covered loss.
- Professional liability – Covers claims resulting from your errors and omissions in the services provided.
- Commercial auto – Covers your business-owned vehicles from at-fault accidents.
- Commercial property – Protects your owned and rented property against losses/damages.
- Workers’ compensation – Covers employees injured at work or because of work.
- Commercial umbrella – Covers claims exceeding your general liability policy.
- Data breach – Pays to recover lost or stolen data.
- Employment practices liability – Covers claims related to discrimination, wrongful termination, and sexual harassment.