The Importance of Business Insurance Claims
Business insurance claims are vital for the survival and recovery of any commercial entity facing property damage. Whether it’s a natural disaster, a fire, theft, or customer injury, being well-prepared can make a huge difference in how quickly and effectively your business bounces back.
Here’s a quick list of what you need to know about business insurance claims:
- Understanding what your policy covers: Know the specifics of your insurance policy to ensure you can leverage it fully.
- Documenting everything carefully: Records and evidence are crucial for a smooth claims process.
- Filing promptly and accurately: Avoid delays and inaccuracies to prevent complications and denials.
- Seeking professional help: Involving experts like public adjusters can improve your chances of a fair settlement.
I’m Scott Friedson, a multi-State licensed public adjuster with over 500 large loss claims settled and $250,000,000 in recoveries. I specialize in navigating the complexities and ensuring prompt and fair resolutions to business insurance claims.
Ready to dive deeper into filing your claim the right way? Let’s get started.
Business insurance claims terms explained:
- Commercial Insurance Claims – Commercial Property Claims We adjust property claims for apartments, condo associations, churches, schools, office, warehouses, retail buildings
- commercial property damage
- property damage claim attorney
Understanding Business Insurance Claims
What Does Business Insurance Cover?
Business insurance is like a safety net for your company. It helps protect you from unexpected events that could harm your business. Here are some key areas that business insurance typically covers:
1. Property Damage: This includes damage to your building, equipment, and inventory. For example, if a fire breaks out, your insurance can help cover the cost of repairs or replacements.
2. Business Interruption: If your business has to close temporarily due to a covered event (like a fire or storm), this coverage can help you recover lost income and pay for ongoing expenses, such as rent and payroll.
3. Liability: This protects you if someone sues your business. It covers legal fees, settlements, and medical costs if a customer gets injured at your business.
4. Worker Injury: Workers’ compensation insurance pays for medical expenses and lost wages if an employee gets hurt on the job.
Common Types of Business Insurance Claims
Understanding the common types of claims can help you better prepare and protect your business. Here are some of the most frequent claims:
1. Fire Damage: Fires can cause significant damage quickly. Many business owners underestimate the likelihood and impact of a fire.
2. Theft: Theft can happen from outsiders or even employees. It’s one of the most common types of business insurance claims.
3. Natural Disasters: Weather-related events like hurricanes, storms, and floods can cause extensive damage. For instance, wind and hail can damage your building and interrupt your business operations.
4. Customer Injury: If a customer slips and falls at your business, you could be liable for their injuries. General liability insurance can help cover these costs.
By knowing what your insurance covers and the common types of claims, you can take steps to minimize risks and ensure your business is protected.
Ready to learn how to file your claim the right way? Let’s get into the steps you need to take.
Steps to File a Business Insurance Claim
Filing a business insurance claim doesn’t have to be complicated. Follow these steps to get your business back on track quickly.
Contact Your Insurance Professional
The first step is to contact your insurance professional as soon as possible. Typically this is your insurance broker or public adjuster. They can guide you through the process and help you understand what you need to do next.
- Timely Notice: The sooner you notify your insurer, the faster your claim can be processed.
- Claims Adjuster: Your insurer may send a claims adjuster to inspect the damage. Be prepared to show them all affected areas and provide documentation.
Review Your Insurance Policy
Before you proceed, take some time to review your insurance policy. This will help you understand what your coverage includes and any specific steps you need to take.
- Policy Steps: Your policy may outline specific actions you need to take when filing a claim.
- Insurable Loss: Check what types of losses are covered.
- Coverage Details: Familiarize yourself with your coverage limits and deductibles.
Prepare an Inventory and Provide Proof of Loss
Next, you’ll need to prepare an inventory of all damaged or destroyed items to substantiate your claim.
- Inventory of Damaged Items: Make a detailed list of damaged items, including descriptions, purchase dates, and estimated values.
- Receipts: Gather receipts or other proof of purchase for the items on your inventory list.
- Proof of Loss: You will be required to submit a signed, sworn proof of loss within 60 days of the insurer’s request. This document outlines the extent of your loss and is crucial for your claim.
Document Damage and Make Temporary Repairs
Proper documentation and immediate action can prevent further damage and support your claim.
- Damage Documentation: Take photos and videos of the damage from multiple angles. Note down the date and time of the incident.
- Temporary Repairs: Make temporary repairs to prevent further damage, like placing a tarp over a damaged roof. Keep all receipts for these repairs, as they may be reimbursable.
By following these steps, you can ensure a smooth and efficient business insurance claim process. Next, we’ll look at additional steps for business income and extra expense claims.
Additional Steps for Business Income and Extra Expense Claims
When your business faces a disruption, filing a business income and extra expense claim can help you recover lost income and manage ongoing expenses. Here’s how to do it right.
Filing Business Income Claims
If your business is forced to close temporarily, you can file a business income claim to recover lost income and cover ongoing expenses.
- Net Income: You need to show your business’s net income before and after the event. This helps determine the loss you’ve incurred.
- Operating Expenses: Keep track of normal operating expenses like payroll and utilities. These are essential for calculating your claim.
- Financial Records: Gather financial records such as profit and loss statements, tax returns, and bank statements. These documents will support your claim and help your insurer understand your financial situation before the disruption.
Filing Civil Authority Claims
Sometimes, government actions prevent you from accessing your business premises. This is where civil authority coverage comes into play.
- Government Action: If a government authority prohibits access to your property due to physical loss or damage in the area, you can file a civil authority claim.
- Business Interruption: Coverage usually starts 72 hours after the government action and lasts up to four weeks. This can help cover lost income during the closure.
- Civil Authority Coverage: Ensure your Business Owners Policy (BOP) or Commercial Package Policy (CPP) includes this coverage. It’s essential for situations like mandatory evacuations or area inspections following a catastrophe.
By understanding these additional steps, you can ensure your business is financially protected during disruptions. Next, we’ll discuss troubleshooting an inadequate settlement.
Troubleshooting an Inadequate Settlement
Sometimes, despite your best efforts, your business insurance claims might not result in a satisfactory settlement. Here’s what to do if you believe your claim was unfairly denied or the settlement amount is inadequate.
Steps to Take if Your Claim is Delayed, Underpaid, or Denied
1. Contact the Claims Manager
First, reach out to the claims manager at your insurance company. Clearly explain your point of view and why you believe the claim should be approved or the settlement increased. Provide a written explanation detailing the issue and include all relevant documentation.
2. Hire a Public Adjuster
You have the right to request an internal review. This means asking the insurance company to review their decision. Review your policy thoroughly to understand your coverage, gather all necessary documents, and submit a detailed explanation of why you believe their decision was wrong. Consider engaging a public adjuster to assist you in documenting, negotiating, and settling your property damage insurance claims on behalf of the insured policyholder. Public adjusters typically work on contingency and can offer a non-litigious path to indemnification.
3. Seek Help from the State Department of Insurance
If your appeal doesn’t resolve the issue, consider contacting your state’s department of insurance. They can provide guidance on your rights as a policyholder and may offer mediation services to resolve disputes. Filing a complaint with the state department can also put additional pressure on the insurance company to act fairly.
4. Consider a Counteroffer
If the settlement amount is too low, you can make a counteroffer. Provide evidence to support your claim, such as repair estimates, financial records, and any other relevant documentation. A well-prepared counteroffer can sometimes lead to a better settlement.
5. Legal Assistance
If you’re facing unjust denials or significant delays, it might be time to seek legal assistance. An attorney specializing in insurance claims can help you understand your rights and the best course of action. They can also negotiate with the insurance company on your behalf, potentially leading to a more favorable outcome.
6. Insurance Litigation
In some cases, you might need to take legal action. Insurance litigation can be complex, but it’s an option if you believe the insurance company is acting in bad faith. Hiring a lawyer may be at your own expense, and there’s no assurance you’ll win the case, or that the insurer won’t appeal, but it might be necessary to protect your business’s financial future. In some states such as Texas, there is recovery for attorney fees to prevailing parties. Chapter 542 of the Texas Insurance Code, also known as the Texas Prompt Payment of Claims Act (“TPPCA”), generally allows an insured to recover interest and attorneys’ fees, in addition to the amount of the insurance claim, when an insurer delays payment of a claim longer than the statute’s imposed deadlines
By following these steps, you can effectively address and resolve issues with your business insurance claims. Next, we’ll answer some frequently asked questions about business insurance claims.
Frequently Asked Questions about Business Insurance Claims
Are Business Insurance Claims Taxable Income?
No, business insurance claims are generally not considered taxable income as long as it doesn’t exceed the value of the actual loss (if so, the overage could be taxable income). When you receive insurance proceeds for a covered loss, it’s typically to reimburse you for the financial damage you’ve incurred, such as property repairs or loss of income.
However, there are exceptions. For instance, if you receive more from the insurance claim than the adjusted basis of your damaged property, the excess amount could be taxed as a capital gain. Always consult a tax professional to understand how your specific situation might be affected.
How Does a Business Insurance Claim Work?
Filing a business insurance claim involves several key steps:
1. Property Damage: If your business suffers physical damage (e.g., from a fire or storm), your first step is to document the damage. Take photos, gather receipts, and make a detailed list of all affected items. Contact your insurer immediately to report the loss.
2. Business Interruption: If your business operations are halted due to a covered event, you can file a business interruption claim. You’ll need to provide financial records showing your net income and normal operating expenses before and after the event. This helps your insurer calculate the income lost during the interruption.
3. Theft: In the case of theft, you should first file a police report. Then, document what was stolen and provide this information to your insurer along with any relevant receipts or proof of ownership.
4. Liability: If a customer or third party is injured on your property, you may face liability claims. Your insurer will investigate the incident and determine if your policy covers the claim. Be prepared to provide detailed information about the incident and any related documentation.
Once you’ve submitted your claim, an insurance adjuster will evaluate the damage and your policy to determine coverage. After the investigation, the insurer will inform you of the claim’s outcome.
What Does Business Insurance Protect You Against?
Business insurance offers a wide range of protections to help safeguard your business:
1. Property Damage: Covers repairs or replacements if your property is damaged by events like fire, storms, or vandalism.
2. Business Interruption: Helps cover lost income and operating expenses if your business is temporarily shut down due to a covered event.
3. Liability: Protects you if someone is injured on your property or if you’re sued for damages related to your business operations.
4. Worker Injury: Typically covered under workers’ compensation insurance, this protects your business if an employee gets injured on the job.
Understanding these coverages ensures you’re well-prepared to handle any unexpected events that could impact your business.
Conclusion
Filing a business insurance claim can be a daunting process, but you don’t have to go it alone. At Insurance Claim Recovery Support, we specialize in helping businesses steer the complexities of insurance claims to secure the maximum settlement they deserve.
Why Choose Us?
Expert Public Adjusters: Our team consists of seasoned public adjusters who are experts in handling commercial property damage claims. We understand the intricacies of insurance policies and can help you interpret your coverage to ensure you get what you’re entitled to.
Maximum Settlement: We aim to maximize your settlement so you can focus on getting your business back on track. Our public adjusters carefully document every aspect of your loss and negotiate aggressively with insurers.
Texas and Nationwide Service: While we are based in Texas, our services extend nationwide. Whether your business is in Austin, Dallas, or nearly any other city across the U.S., we are ready to assist you.
No Recovery, No Fee: We operate on a contingency basis, meaning we only get paid when you do. This aligns our success with yours and ensures that we are fully committed to achieving the best possible outcome for your claim.
How We Can Help
From Start to Finish: We assist businesses before, during, and after they submit their claims. Our goal is to make the process as smooth as possible, reducing the stress and administrative burden on you.
Negotiation and Litigation: If your insurance company offers a settlement that is less than what you deserve, we will negotiate on your behalf. Should negotiations fail, we are prepared to refer clients to commercial insurance attorneys who can take your case to court to ensure you receive a fair settlement.
Specialized Coverage: We handle claims for various types of damage, including fire, storms, theft, and business interruption. Our expertise ensures that all aspects of your loss are thoroughly documented and compensated.
Get Started Today
If you’re facing a business insurance claim, don’t wait. Contact Insurance Claim Recovery Support to discuss your situation and schedule a complimentary assessment.
Your peace of mind is our priority. Let us help you get the settlement you deserve so you can focus on what matters most—running your business.
