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Corin Cook

By: Corin Cook on September 18th, 2023

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What to Expect During a Business Insurance Claim

Business Insurance | commercial insurance

We know there are not many more situations more stressful than having to file a business insurance claim. After all, you care about your business and it is a big piece of your well-being. So when a disaster occurs, it is a completely normal reaction to panic.

Then, after the initial panic wears off, there are even more things to worry about.

“Should I file an insurance claim? How do I report the claim? Will I even be covered?”

We get it. Since 1922, our team at Berry Insurance has been helping clients navigate business insurance claims in as stress-free of a way as possible, so you are in the right place.

We know that when the time comes to file a claim, you want it to be as quick and as painless as possible, so read on to learn more about the process so you are prepared if and when the time comes that you need to file a claim.

It’s important to note, this article pertains to most types of business insurance, but is not relevant to workers’ compensation insurance. (Be on the lookout for that article coming soon)

Collect detailed information

First thing’s first: if you’ve had an incident within your company and think there is even a remote chance you may want to file an insurance claim, you’ll want to collect some details about it.

Depending on the type of insurance, these details will include what happened, where and when it happened, what was damaged, and names and contact information of those involved. You’ll also want to take notes of any witnesses or any officers who responded to the incident (and get a copy of the police report.)

Write the details down, take photographs, and draw diagrams if necessary to be as detailed as possible.

Your insurance carrier will likely need to collect several details on the incident to file a claim, so take notes on everything to make the claims process smoother and to increase your chances of coverage.

File a claim

Once you assess the damage, you can decide whether you want to file a claim with your insurance company.

Usually the rule of thumb is if the damage or loss would cost less than your deductible to repair or replace, you might not want to file a claim since it could actually cost you more.

But, there’s a catch. If the repairs cost more than you anticipated or other involved parties decide to sue you, you may not be covered if you decide to file the claim later.

If you do not want to file a claim, you should at least report it to your insurance agent or carrier “for records only” as soon as possible. This way, your insurance company is aware of the incident in case anything comes up in the future, but it does not affect your record or rates. 

If you choose to file a claim with your insurance company, you should be aware of a few steps. In a perfect world, the following steps should be carried out quickly and in order, but, when it comes to business insurance things can get a little tricky. We’ll get into that a little more later.

  • After the incident, you should report all the details we discussed above to your insurance agent or carrier as quickly as you can.
  • Once you report the details, your insurance company will assign you an adjuster to take over and process your claim. 
  • Your adjuster will likely send an appraiser to come assess the damage to help the adjuster decide how to proceed and how much to pay out.
  • Once your adjuster completes their process, your claim will be paid subject to your deductible and you’ll be all set!

Generally, this process will take about a week to a few weeks, but it doesn’t always work out that way.

What can go wrong/hold up the process?

The steps mentioned above outline how a business claim process should go, but as we know, things don’t always go exactly as planned.

Business claims can be complex, so sometimes there may be additional steps that hold up the process.

All businesses are so different. A small store, medical office, mechanic, construction company, school, town, business office, and every other type of company are vastly different in how they operate each day. This can sometimes cause issues because insurance adjusters and appraisers are trained only in insurance, and may not be experts when it comes to each and every industry.

Because every business and every claim is so unique, adjusters and appraisers are constantly coming across scenarios they have never seen before. Sometimes this may cause a hold-up in the claims process as they research, call in other experts, and get the answers they need to ensure they are navigating the claim fairly and accurately.

If this is the case for you, you may experience a delay in claim settlement and may be contacted and asked for more information. Your insurance carrier should be keeping you up-to-date throughout the process, but if you feel in the dark, you should reach out to your insurance agent so they can keep you up to speed.

What if the claim isn’t my fault?

Now if someone else caused the claim, but it impacted you or your property, the process will be a little different. 

The process is essentially the same, and you will still be subject to your deductible, but instead of waiting for your insurance to pay, you will be waiting for the at-fault party’s insurance company to pay. 

You also have the option of filing the claim with the at-fault party only, but that could also delay the process and even prevent payment.

Be prepared before the claim

If you do have an incident resulting in a claim, in addition to knowing how to navigate the claims process, you want to be sure you’re paid. As a business owner, there isn’t much of anything more frustrating than experiencing some sort of damage or loss, then realizing your insurance won’t cover you.

But if you don’t keep your policy up to date, it can happen!

Your business is changing constantly, and your insurance needs to keep up if you want to ensure coverage. Check out this article Why You Should Review Your Commercial Insurance Annually to learn about the importance of insurance reviews, and to know what to look out for.

With winter just around the corner, you may be wondering how you can protect your business during the colder months. If so, read our guide on how to avoid common winter business insurance claims.