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5 Min. Read

Business Insurance Claims: How To File Claims And Get Paid Out Faster

When a small business experiences a loss because of damage, accident, crime or liability, the business owner needs to file an insurance claim to help cover the financial losses. Insurance coverage protects your business against common risk factors. There are multiple insurance policies that you could need to file a claim against, including general liability, commercial property, workers compensation and commercial auto insurance. Understanding the proper way to file your business insurance claim can help you recoup your money quicker so you can get your business operations back to normal as soon as possible.

Explore these topics to learn how to file business insurance claims and get paid out quickly:

What Are Business Insurance Claims?

How to File A Business Insurance Claim

How Long Do Insurance Claims Take?

What Are Business Insurance Claims?

A business insurance claim is a formal notification sent to your insurance company to alert them to loss or damage you’ve suffered and request compensation for the loss, if it’s covered by your insurance policy. Your insurance policy will cover you for certain risks and if the loss is related to a risk covered in your policy, you should file a claim.

Your insurance provider will investigate your claim once they receive it and if they approve the claim, the company will issue a payment to you or to a third-party affected by the claim, on your behalf.

Learn about the different insurance policies recommended for small businesses.

How to File A Business Insurance Claim

It’s important that small business owners know how to properly file an insurance claim, since 40 percent of small businesses end up filing claims against their insurance policies. Follow these steps to file a business insurance claim the right way:

Make a Plan Ahead of Time

It’s best to plan ahead in case you ever have to file an insurance claim. Hopefully you’ll never have to use your plan, but being prepared can help you file a claim quickly and accurately. Know what you’ll need to do in the case of an accident or disaster, like taking photos to record damage. Consider installing surveillance equipment to have video evidence in the case of theft or vandalism at your company’s building. Get standard reporting forms from your insurer so you have them on hand in case you need to file a claim. Be sure to train employees on how to use the forms.

Gather Evidence

After your business experiences a catastrophe that requires an insurance claim, be sure to collect evidence to pass on to the insurance company. Take photos following accidents or disasters to record the damage. Make note of people who were present to witness the event so they can be called to give testimony, or have them write down what they saw on site, when the memory is still fresh. Take an inventory of everything damaged, ruined or missing.

File a Police Report, if Necessary

If you’re filing a claim related to a car accident or theft, or a crime that occured on your business’s property, call the local police to file a police report. Many insurance companies require a police report in the case of a crime or multi-vehicle accident.

Contact Your Insurance Broker

Reach out to your insurance agent or broker to inform them of the situation. They’ll be able to explain the claim process to you and will ask questions about the incident you’re reporting. They’ll help you fill out the claim form and submit it to the insurance company.

Discuss with Your Insurance Adjuster

Once you file your insurance claim, you should be assigned an adjuster within a few days. The adjuster will investigate your claim and determine how much liability rests with the insurer in your case. The adjuster will require a proof of loss form from you as well as access to any supporting evidence, such as photos or videos.

Get Assessments from a Professional

Next, get quotes and estimates from professionals for repairs. If a building owned by your company has been damaged by a storm or fire, call a contractor to come and assess the damage and estimate the repair costs. Try to get at least two estimates. If a work vehicle has been damaged in an accident, have it looked at by a reputable mechanic for an estimate of the cost of repairs. You’ll have to pay for their services, but it could help with proving your claim.

Consider Speaking with a Lawyer

Depending on the size of the claim, you may wish to consult an insurance lawyer for legal advice. An insurance lawyer can help you put together claims documentation and guide you through the claims process. They can also help resolve any disputes that arise with the insurance adjuster.

Get Accounting Help

Consider hiring a forensic accountant to help you properly file the documentation for your business insurance claim. In complex cases, a forensic accountant can help accurately evaluate the losses and what the insurance company should cover.

How Long Do Insurance Claims Take?

The amount of time it takes an insurer to pay an insurance claim depends on the complexity of the case, whether there are any disputes over the claim and what state your business is located in. Most states set timelines mandated by law outlining how long an insurance company has to pay out a claim. For example, in California, insurers must acknowledge a claim within 15 days of it being filed. They then have 40 days to accept or deny the claim. If the claim is accepted, the insurer must pay out the claim within 30 days of the settlement date.