How Do Business Insurance Claims Work

The thing about insurance is that it’s something that you have to pay for but hope never to need. However, you never know when something will happen that will cause you to have to make an insurance claim. Since it is hopefully not a common thing for you to do, you may not know the ins and outs of the process. Read through this guide to understand how business insurance claims work, and then cross your fingers that you never need actually to use that knowledge. 

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Make sure that you follow all of the necessary steps of filing your claim properly. Otherwise, you run the risk of your claim not being approved. If that happens, you can fight the insurance company or pay any costs out of your pocket. Neither one is a great solution.

Contact Your Broker

As soon as you think you might need to make a claim, you should be calling your broker immediately. It doesn’t matter if it’s an accident, legal action brought against you, or damage from a natural disaster. The sooner you contact your insurance broker or provider, the better. 

When you contact them, make sure you provide a list of anything you might need reimbursement for. If it is a property damage situation, then you should have an itemized list of everything you’ve lost and needs to be replaced, along with what you estimate the value of each to be. If you are sued by someone else, provide your insurance with court documents. Your insurance provider needs to know what you are at risk for so they know how to proceed. 


After you have provided all of your information, your insurance provider will open up an investigation. This is to ensure that there is no insurance fraud and to make sure of the amounts to be reimbursed. They will check the accident scene, inspect the details behind injuries, and see if the incident will be eligible for coverage. 

Regardless of your claim, from professional liability to workers comp insurance, you and your employees must always be truthful about the circumstances. If it turns out that you have omitted or been dishonest about some details, then you could end up listing coverage. Not only that, but depending on the severity, you could face legal consequences. Do whatever you can to make the process faster and more accurate. Please provide contact information for witnesses, and answer any questions as they go. 

Evaluating Damages

Your insurance provider may decide they need to hire experts to examine your situation thoroughly. This can include architects, contractors, and appraisers to fully explore the case and make repairs. When they fully grasp the level of damage, they will probably also recommend certain contractors to perform the repairs or reconstructions. You do not have to use these preferred contractors, but it may make things simpler for you. 

Policy Review

During the investigation, your provider will also review your policy with you to see what qualifies for coverage. Ideally, everything is covered, but certain aspects of an incident may not be eligible. They will also let you know about any deductions you will have to pay before coverage kicks in. That way, you will have a clear picture of how much you may have to pay out of pocket when the process is over. 


At this point, after the investigation is finished and your claims are deemed valid, the insurance company will arrange to provide you with the funds. In the best-case scenarios, this will happen quickly, although if you have a complicated case or there are issues with it, it may take some time before you get all of the funds coming to you. 

Common Errors

During the entire process, there are specific errors that many people wait that can cause it to take longer or for the claim to be rejected. The first error is not knowing what you are covered for in the first place. You might think that your general liability covers you for everything, but there is a good chance that it does not. Make sure that you review your policy every year and identify if any aspects of your operations are not covered, but that should be. 

Another standard error is waiting to contact the insurance provider or broker. This might not seem like a big deal, but it certainly can be. For one, your memory is fresher as soon as the incident happens. However, waiting could affect how much compensation you get. If you’ve already made some repairs, the insurance company won’t know how much damage there was. Some business insurance policies require that a business report any claims within 48 hours of the incident or be refused compensation. 

The final standard devastating error is not correctly documenting damage. If you can’t prove that something was damaged or lost, then the insurance company won’t pay you out for them. Take photographs of everything, from your physical property to any contents within the building that have been damaged. Document every contact you have with your insurance company so that you always know what they are communicating to you. The goal is to make sure that you are paid out for everything. The only way that will happen is if you thoroughly document everything that you will require compensation for. 

Hopefully, you never have to file a business insurance claim. Create a safety regime within your workplace and do whatever you can to protect everyone entering your building, from staff to customers. However, there are many things for which you can’t prepare, and you do not want to have to declare bankruptcy because you make mistakes while filing your claim. You can make sure that you file correctly and get the compensation you deserve by following these steps. 

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