How to File a Business Insurance Claim

secure Editorial Standards

SmartFinancial Offers Unbiased, Fact-based Information. Our fact-checked articles are intended to educate insurance shoppers so they can make the right buying decisions. Learn More

Business owners should take measures to safeguard their businesses by purchasing proper commercial insurance coverage. Small businesses experience many unforeseen disasters, including property damage, accidents, crime and liability. By purchasing a comprehensive commercial insurance policy, you can protect your business from these common risks. For most businesses, comprehensive coverage includes general liability, commercial property, worker’s compensation and commercial auto insurance.

At one point or another 40% of small businesses will file a claim against their insurance policy. A business insurance claim is a formal notification sent to your insurer to notify them of losses or damages your business has incurred in order to request compensation for losses covered by your policy.

Understanding the proper protocol for filing a business insurance claim can help you recover costs and get your business operations back to normal as soon as possible. It also requires preplanning. See below for steps you should take before and after any loss you need to report.

Step 1: Pre-planning

Understand Your Coverage

In order to make sure your insurance policy properly covers your business, you need to understand how you are covered by your policy. Purchasing your commercial insurance policy through a trusted and experienced agent can save you thousands of dollars. Ideally, your agent understands the risks involved in your industry and can help you customize your plan. Read over your entire insurance policy with this person so that you not only know what you are covered for but also what your responsibilities are to your insurance company after a loss.

Obtain Written Reporting Forms and Records

Standardized and readily accessible forms should be available for reporting unforeseen accidents or major incidents. Ask your insurance agent for these claims forms. Keep them accessible to yourself and your designated employees, after ensuring that everyone understands how to properly fill them out.

If you are filing a business interruption claim, have records ready to substantiate your losses. These records must demonstrate the income your business was generating both before and after the loss. Keep detailed records of extra expenses you incur if you operate your business in a temporary location during an interruption period. If you are forced to close your business, record expenses that continue during your business’s closure, including rent, utilities and advertising costs.

Install Cameras

Surveillance cameras can provide you with a digital record of events. When filing a claim, time-stamped photographs and video clips can substantiate your written claim.

Outside surveillance cameras should be strategically placed near entrances, exits and parking areas. Not only will these cameras deter thieves and vandals, but they will also catch them in the act if they make the mistake of trespassing onto your property. Choose a camera that will retain a digital record for at least 30 days.

Indoor surveillance cameras can deter employees or clients from stealing or otherwise acting unprofessionally. Train employees on how to use and access the footage on the camera. Many camera systems are remotely accessible, providing additional oversight when you are absent. You may also want to consider placing cameras in company vehicles. The footage would be valuable if your employee were to be involved in an auto accident while operating a work vehicle.

Mock Drills

Test your employees by staging mock disaster drills. Your employees should understand your company’s disaster plan, including the location of the nearest exits. Have safety plans developed with the appropriate protocol for handling various natural and manmade disaster scenarios, which could range from earthquakes to an active shooter situation. Make sure your disaster plan complies with your business’s state and federal safety regulations.

Get a Free Insurance Quote For Your Business

Step 2: Reporting a Loss

When there is an accident or major incident, multiple agencies need to be contacted. Always report incidents like fire, theft, weather damage and third-party injuries.

Call Law Enforcement

There are many incidents in which you would need to contact law enforcement, ranging from a car accident involving a company vehicle to property theft. Many insurance policies explicitly state that you must report theft losses to the police.

Of course, the safety of your employees and clients is always your number one priority. If there is anyone injured as a result of an accident, contact 911 to request proper medical or emergency services immediately.

Call Your Insurance Professional

Notify your commercial insurance agent of any accidents or major incidents as soon as possible. They will collect information from you to prepare a claim which they will send to the insurer on your behalf.

Make sure to provide as much information as possible, including any detailed notes and digital evidence. Ask your representative for a timeline on the claims process and information on contacting the claims department directly.

Contact Your Insurance Company

Once your claim has been received, your claim will be assigned to an adjuster. Try to contact your adjuster directly within 72 hours of filing your claim and save their contact information so that you can easily reach them throughout the claims process.

The adjuster you are assigned to may be an independent contractor or employed by your insurance company. Ask your adjuster for a timeline on the claims process. Gather as much information as possible on what to expect going forward from your adjuster.

Contact Professionals

After a disaster, take appropriate steps to protect your property from further damage by making temporary repairs if necessary. You may be able to keep your business up and running if you take action right away. However, save all damaged parts in case your claims adjuster requests them for examination.

Consider contacting a legal professional to assist in preparing your claims package in case there are discrepancies between what you and your insurer may have in mind in terms of coverage. If you are filing a business income claim, consider contracting a forensic accountant to assist you in preparing the documents necessary for filing your claim.

Step Three: Follow Up

Follow Up with Your Adjuster

Ideally, your adjuster will be keeping you informed throughout the claims process, but if you have not heard back in several days, you should follow up. Be polite but assertive and ask for concrete dates for follow-ups throughout the claims process. Mark your calendar with these dates, and stick to them! If your adjuster is very uncooperative, you can ask your insurance agent for assistance.

If Necessary, Follow Up with Appropriate Agencies and Professionals

If you are unhappy with how your claim was handled, tell your agent or claims manager. They are there to help you through this process. You can also contact your insurance company’s consumer affairs or complaint department if you believe you deserve a larger settlement or that your claim was unfairly rejected. If you are not feeling happy with how the above-mentioned parties are handling your claim, you may also contact your state department of insurance.

If all of these steps fail, you have the option to contact an attorney who specializes in insurance matters to file a lawsuit. Inform your attorney of any settlements offered by your insurance company or provide information on the rejected claim. The attorney will use this information to judge whether you have a legitimate case or not. Bringing a legitimate and well-documented lawsuit to trial may result in a much larger settlement.

Attorneys either work on an hourly basis or contingency basis, in which they are entitled to a portion of whatever settlement you ultimately receive. Request your lawyer’s fee structure in writing before you pursue a lawsuit.

Follow up with your lawyer on the status of the case as it progresses. Your attorney will provide you with the settlement information before it is executed. You must agree to any settlement reached between your attorney and the insurance company before it is made final.

How Long Will My Claim Take?

The amount of time it will take for yourself or the affected third party to be compensated by your insurance company depends on the complexity of the claim and what state your business operates in. Most states have a mandated timeline for how long your insurance company has to process and financially honor your claim. For example, in California, insurers must acknowledge a claim within 15 days of its filing and deny or accept the claim within the proceeding 40 days. If the claim is accepted, your insurer must pay for the claim within 30 days of the settlement date.

If you are in the market for a new commercial policy with better coverage at a lower rate, you can trust SmartFinancial to help streamline and simplify the process. Our technology provides customized insurance offerings based on your zip code. We can match you with a partnering insurance agent from our vast network of knowledgeable insurance professionals. All you need to do is fill out our simple three-minute questionnaire to start the process.

Get a Free Commercial Insurance Quote.