How to File a Small Business Insurance Claim Successfully

Updated: Mar 23

It’s a funny thing. When you shop for small business insurance, you’re mostly worried about making sure you purchase the right amount of coverage for your line of work and the size of your company.

But you never really think about having to use your business insurance; it’s just always there in the background, protecting your small business.

But, accidents do happen, and there will likely come a time when you have to actually use your insurance and file a claim. When that time comes, you may be wondering, “How exactly do I file a small business insurance claim, anyway?”

Today, we’ll explain it all. Read on to learn what you should do when filing a claim with your small business insurer.

Step 1: File the claim as soon as possible.

A number of things can happen that would require you to file a small business insurance claim. A customer may get hurt while buying something at your store, or one of your employees could accidentally damage an expensive vase while painting your client’s new nursery.

When an accident happens, your first priority should be making sure everyone is okay. If anyone is injured, ensure they receive medical attention. If something was damaged, do what you can to prevent further damage or injury. If a crime occurred, file a police report.

Once you’ve addressed these immediate needs, it’s time to contact your insurer to file the insurance claim. It’s important to file the claim as quickly as possible. Why? The sooner you file the claim, the sooner your insurer can help you.

In cases where someone has sued you with a claim of bodily injury or property damage, time is even more of the essence. In fact, some states require businesses to respond to lawsuits within a set period of time. Fail to do so and a default judgment may be made against you.

Step 2: Gather the necessary materials.

Next, you need to gather all the information your insurance company will need to process your claim. Look at the loss reporting provision of your insurance policy to double-check what you will have to do and what information you will have to provide.

At a minimum, write down what happened as soon as you can after the incident occurred, while everything is still fresh in your mind. Gather contact information from everyone involved, including their names, addresses, and phone numbers - this includes bystanders who may be needed as witnesses in providing information to the insurer. Take pictures and record video. Request a copy of the police report. Take note of additional details, including the location and time, and anything else you think of that may be relevant.

If property damage occurred, temporary repairs may be required to prevent further damage. Always take pictures of the damage before the repairs are made, so your insurer has a full picture of what happened. Also take care to document (or have the claimant document) the cost for those additional repairs, and save copies of quotes and invoices.

Step 3: Report your claim with your insurance company.

Finally, it’s time to submit your insurance claim. You may be able to do this via phone, email, fax, website, or mobile app. It depends on your insurance provider. If you’re not sure what to do, simply search for “file a claim [name of your insurer]” and let Google find the info for you.

Here’s the information you’ll need to include in your claim:

  • Your name, email address, and phone number

  • Your policy number

  • The name and contact information for the insured (that’s you) the claimant, and any witnesses

  • How, when, and where the accident took place

  • The current location of any property that was damaged

  • The photos and videos you took

  • The police report if you filed one

  • A description of the accident

Once your claim is filed, you’ll receive a claim number. Write this down. You’ll reference this in all future communications with your insurer.

It’s extremely rare that the claim report will be the only time you contact your insurance company. Additional documentation related to your claim will come to you, such as bills for medical treatment or property repairs, emails, assessments, reports, and other correspondence. When you receive this information, send it in to your insurance company as soon as possible. Note your policy number and claim number on each document.

What happens next?

Now that your claim is filed, it’s time to wait until it gets approved or denied. How long can this take?

It depends. Like you, insurers want to settle claims as quickly as possible, but it takes time for them to process the information, perform any necessary investigation, and determine your liability. How long that process takes will depend on the complexity of the accident and the number of people involved.

To help speed up the process, there are a few things you can do.

  • Send in all new documentation, bills, and correspondence related to the claim as soon as you receive it. The more you keep your insurer in the loop, the quicker they can investigate, defend and, where appropriate, settle the claim.

  • Don’t admit responsibility for any injury, errors, or damage related to the claim. This is a provision of your policy. If you violate this condition, you could jeopardize your coverage.

  • Don’t discuss the incident, or share any related documents, with anyone besides your insurance company or law enforcement.

  • Be honest and upfront with your insurer. Trying to hide or misrepresent information can be seen as fraudulent, which could also jeopardize coverage.

  • If the claimant needs to make temporary repairs to prevent further damage, let them know that permanent repairs should not be undertaken until approved by the insurer If an inspector comes out, they will need to see the damage as is.

Once the insurer has finished the claim investigation, your insurance provider will advise of the disposition.

Why might my claim be denied?

There are a couple reasons an insurer may deny a claim. The policy may not have been in force at the time of the incident, either because the policy has been cancelled, or it has expired. You also may have done something intentional to cause the accident, or attempted to submit a fraudulent claim.

Insurance claims may also be denied if the accident occurred as a result of activities that aren’t covered by your policy. For example, if you carry handyman insurance but you caused injury or damage while performing roofing activities, your claim may be denied if roofing is excluded g under your policy. It’s important to remember that every insurance carrier is different, and claims are handled on an individual basis.

Insurance policies may be claims-made or occurrence. Occurrence policies cover claims for injury or damage that occurred during the time your policy was active, even if the claim is brought after your policy period ended, and irrespective of when your work was performed. Claims-made policies, on the other hand, only provide coverage for claims made during your policy period. If a former client sues you after you no longer carry insurance, even if it’s for work you performed while your policy was active, a claims-made policy may not provide coverage for the claim.

These are just a few reasons a claim may be denied. Review your policy to understand specific exclusions and conditions that may affect your coverage, and reach out to your insurer with any questions you may have.

If your claim is denied, all hope is not lost: you may be able to appeal it. Again, you can refer to your insurer and your insurance policy for instructions on how to make an appeal.

Oh happy day, your claim was settled. Now what?

Congratulations! Once your insurer has reviewed your claim and confirmed coverage, you’ll be notified that your claim has been settled. Then the insurer will pay another party directly on your behalf.

The reimbursement process typically doesn’t take long. Most states require insurers to process payments fast, usually within 30 days, unless there is a good faith dispute regarding the facts and circumstances surrounding the claim.

Be prepared with small business insurance you can trust

Once the accident occurs, the worst is over. Filing a claim takes some time and a little paperwork, but it doesn’t have to be difficult.

If you’re fortunate enough to be reading this prior to needing to make a claim, create a plan now so you can be level-headed when an accident does occur. Gather the contact information for your insurer, and download a claim notice report if possible. If not, create a checklist of the things you’ll need to gather to submit your claim, including contact information for you and any third parties, including witnesses, the date and location of the incident, a description of what happened, and any photos, videos, or supporting documentation.

When the worst happens, you’ll be ready. Until then, protect your small business with general liability insurance. You can get an instant quote for general or professional liability insurance from our friends at Thimble here.

Guest Authored by Terri Hitchcock, JD at Thimble

Terri is currently the Chief Insurance Executive at Thimble Insurance and was previously a Principal and Director of the product design practice area with Perr & Knight, a major insurance consulting services firm. Her areas of expertise are reinsurance and insurance operations, contracts, compliance, product development, and underwriting, having provided such services to clients in the industry over the past 30 years. Terri graduated with a B.A. in English and French from the College of the Holy Cross. She received her JD from the University of Maryland School of Law.

DISCLAIMER: The information provided through Fighting For Small is intended to provide general information only and should not be considered legal, tax, investment, financial, or other advice. You should seek professional advice before making any decision that could affect your business. All product names, brands, trademarks, and registered trademarks are the property of their respective owners. Use of these names trademarks and brands does not imply endorsement.

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