Business Insurance Claims 101 | How To Submit A Claim For Business

What is a business insurance claim?

A business insurance claim is a formal request made by a business to its insurance company for compensation for a loss, damage, or other incident covered under the business's policy.

Filing a business insurance claim is important for getting help from your insurance company in case of loss, damage, or other covered incidents. By submitting a claim, you are taking proactive measures to recover financial losses caused by events such as property damage, theft, professional liability, or business interruption.

It's a positive and reassuring process that aims to provide you with the necessary coverage and compensation during challenging times.

Insurance claims for business examples

Here is an example of when a business insurance claim would be approved:

A severe thunderstorm caused extensive damage to a small retail store, including the building, contents, and merchandise. The store promptly filed a claim, documented all the losses, and provided an itemized list of damaged merchandise. Fortunately, commercial property insurance covers storm damage to the building and its contents.

Here is an example of when a business insurance claim would be denied:

A manufacturing company filed a claim for water damage from a burst pipe. The insurance company found that the damage was due to a lack of maintenance and was not reported within the required timeframe.

How to file an insurance claim for your business

Filing an insurance claim for your business involves several steps to ensure you receive the coverage you are entitled to. Here are ten steps for how to file a claim for your business:

Review your policy: Before starting a claim, carefully review your insurance policy to understand coverage, exclusions, and the claims process. Take note of any claim filing deadlines.
Notify your coverage provider: Contact your insurance company as soon as possible after the incident. Many insurers have a specific time frame within which you must report a claim.
Prepare the following information for your claim: Have your policy number, date and time of the incident, description of the incident and damage, photographs or videos of the damage, a police report (if applicable), receipts, invoices, or estimates for damaged property or equipment.
Complete forms: Your insurance company will supply a claim form. Fill it out accurately and provide details about the loss or damage.
Keep your records: Keep thorough records of all interactions with your insurance provider, including emails, letters, and phone calls. Note the name of the representative you speak with and summarize your discussions.
Work with the adjuster: Your insurance company will send an adjuster to assess the damage. Be prepared to provide any requested information or documentation. The adjuster's report will determine the amount of your claim.
Get replacement or repair estimates: Get multiple repair or replacement estimates, provide them to your insurance company, make temporary repairs if needed, and keep receipts for possible reimbursement.
Review the offer: After your insurance company processes your claim, review the settlement offer carefully. If you disagree, you can negotiate or provide additional evidence.
Accepting the settlement: If you accept the offer, follow your insurer’s instructions for receiving the payment and understand any required conditions or releases.
Monitor your claim’s progress: If delays or issues occur, contact your insurance representative for updates.

5 reasons why a business insurance claim could be denied

There are a handful of circumstances where an insurance company may deny a business insurance claim. Here are a few instances to keep in mind:

Not having the right coverage: If your insurance policy does not have the right type of coverage for a specific claim, no insurance provider will pay for any damage or loss you experience. Everything is not included in the insurance. There may be certain perils or threats that are excluded from your policy. For example, if you are driving your vehicle for business purposes, but you do not have commercial auto insurance, you will not be covered.
Fraudulent claims: Insurance claims found to be fraudulent, intentionally causing damage or loss, may be denied. Insurance is intended for unforeseen and accidental events, not intentional fraud. Committing insurance fraud is illegal and can lead to criminal charges, fines, or imprisonment.
Failure to renew or pay: Failure to pay insurance premiums on time may result in policy cancellation and subsequent claim denial. Maintaining up-to-date premium payments is crucial to keep coverage active.
Unapproved modifications to business property or operations: A claim could be denied if a small business makes significant changes to its operations or property without notifying its commercial insurance broker or insurer. Failing to disclose information about your business can often result in a denial.
Late filing times: If you file a business-related claim late, it can be denied. Most policies have clear rules and expectations about when and how to notify their coverage provider about an incident.

Business insurance claims FAQs

When do you claim business interruption insurance?

You can claim business interruption insurance when an unexpected event forces your business to halt operations, resulting in lost income. Provide detailed financial records and documentation to support your claim.

How do you claim business insurance?

When claiming business insurance, promptly inform your company about the incident, provide detailed documentation (photos, receipts, and a completed claim form), cooperate with the insurance adjuster's assessment, and review the settlement offer for fair compensation.

Ensure your business has the coverage it needs – you never know when a claim may need to be filed

Navigating business insurance claims can be complex, but with the right knowledge, it can be manageable. This guide breaks down the process, offers expert advice, and shares real-world examples to help you file claims effectively and protect your business.