How Do I File a Business Insurance Claim? 5-Step Guide

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

Understanding the proper protocol for filing business insurance claims can help you recover costs and get your business operations back to normal as soon as possible. In this comprehensive guide, we explain how the process works and what you’ll need to file a claim. Also, learn what options are available if your claim is denied.

Key Takeaways

  • Contact your insurance provider as soon as possible after a covered loss.
  • Have any documentation on hand to make the claims process as simple and smooth as possible.
  • You can seek legal counsel if you feel your claim was falsely denied.
  • Burglary and theft are among the most common types of claims filed by businesses.

What Is a Business Insurance Claim?

A business insurance claim is a request made by a business owner to their insurance carrier to pay for losses covered under their policy. Business insurance policies can vary greatly so coverage can vary from business to business. The table below shows some common types of events that may trigger a business claim:

Type of Claim


Property Damage

Commercial property claims include damage to the physical structure of a business or its contents, such as inventory, equipment or furnishings.

General Liability

Coverage is available if a third party is injured on business property or suffers harm as a result of the business’s operations.

Business Interruption

This type of claim is made when a business is unable to operate due to a covered event, such as a natural disaster or other catastrophic event.

Employee-Related Claims

This may include claims related to workers' compensation, wrongful termination or discrimination.

What Do I Need To File a Business Insurance Claim?

In the next section, we’ll explain step-by-step how to file a business insurance claim but before we do, keep in mind you will need the following items:

  • Your policy number and insurance company information
  • Description of the incident, including the date, time and location
  • Documentation (e.g., police report, photographs, videos, written records)
  • Estimate of damages
  • Correspondence between you and third party (for liability claims)

How To File a Business Insurance Claim

The following steps can help you file a commercial property damage claim if a covered event occurs.

1. File a Police Report, If Necessary

Any equipment or business that was damaged due to malicious activity or stolen should be reported to the police so your carrier can provide you with proper compensation. This may include acts caused by outsiders or employees. In fact, 75% of employees report stealing at least once from their employer during their tenure which causes an estimated $50 billion in losses.[1]

2. Take Pictures of the Damages

Capture clear pictures of the damages, whether it’s scorch marks because of a kitchen fire or broken windows and destroyed inventory because your business was vandalized. Videos can be useful documentation, as well.

Don’t forget to look at your security footage if you have cameras set up. If the loss involved criminal activity, you should submit a copy of the footage to the police and your insurance company.

3. File an Insurance Claim and Submit Documentation

Contact your insurance company to file a property damage claim. Your claim will be assigned an adjuster who can guide you through the claims process, including confirming if the incident was a covered loss and how much your deductible will cost. During this step, you will need to provide details surrounding the incident:

  1. Submit documentation: Provide a detailed description of the incident that caused the loss or damage, including the date, time and location of the event and pictures or videos taken in the second step.
  2. Estimate the damages: Provide any repair or replacement cost estimates. Keep in mind that estimated damages should be calculated at the physical business asset’s actual cash value, which will deduct for depreciation factors like age and wear and tear.

The claims process can be lengthy depending on the complexity of the investigation. 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.

4. Accept the Settlement

After investigating the claim and confirming the incident was a covered loss, your insurance company will offer you a settlement. The amount of time it takes to receive your payout will vary by insurance carrier and may be subject to state laws. This information can be obtained from your local insurance department.

5. Make Necessary Repairs

You can send the receipts for materials and the like to your insurance company for reimbursement. Additionally, hold on to any damaged equipment in case your insurance adjuster wants to see them.

If temporary patches won’t allow your business to reopen, you may need to relocate your business operations while more extensive repairs are underway. Business interruption insurance will cover the relocation costs. It can even cover lost income if your operation is unable to function temporarily.

What If I Need To File a Liability Claim and I’m Being Sued?

Similar to filing a property damage claim, filing a liability claim will require contacting your insurance company and providing your policy number, personal information, business information and any documentation that will help with the claim process. Record any correspondences between you and the injured party if there are any.

You will then need to decide if you will try and reach an agreement with the injured party, such as paying for their medical bills if they were injured or replacing their damaged property.

The worst-case scenario is a liability claim escalates to a lawsuit. If this happens, your insurer should cover your attorney fees and settlement costs.

How Long Do Business Insurance Claims Take?

The length of time it takes to process a business claim can take several weeks depending on a variety of factors, including the type of claim, the size of the claim, the insurance company and the complexity of the case, as well as the payout laws of your state. For example, California law states that a business should acknowledge the claim within 15 days of notice and then either approve or deny the claim within 40 days.[2]

Get Matched With a Business Insurance Agent Today

What Happens if My Business Insurance Claim Is Denied?

If your claim is denied, you have several options. If you believe the claim was denied unfairly, you can appeal the decision by providing additional documentation or information to support your claim. You may also want to consult an attorney specializing in the claims process.

If you believe your insurance provider acted in bad faith or breached the terms of the policy, you may want to consider taking legal action against your carrier. Inform your attorney of any settlements offered by your insurance company and provide information on the rejected claim. The attorney will use this information to judge whether you have a legitimate case or not.

If the event in question was excluded from your policy, you may need to explore other options for payment, such as loans or grants, to cover the losses or damages.

Which Commercial Insurance Claims Are the Costliest?

East Insurance Group compiled a list of the most expensive claims for businesses:[3]

Type of Claim % of Claims Average Claim Cost
Burglary and Theft 20% $8,000
Wind and Hail Damage 15% $26,000
Water and Freezing Damage 15% $17,000
Fire Damage 10% $35,000
Customer Slip and Fall 10% $10,000
Reputational Harm < 5% $50,000
Vehicle Accident < 5% $45,000
Product Liability < 5% $35,000
Customer Injury and Damage < 5% $30,000
Struck by Object < 5% $10,000


What are the most common business insurance claims?

According to Globe Midwest Adjusters International, the most common business claims are burglary and theft, water damage, customer injuries, reputational damage and product liability.[4]

How are business insurance claims paid?

Payouts are typically made via check or electronic wire directly to the policyholder. The payment amount is based on the terms of the policy and the investigation into the claim conducted by your provider.

Should I avoid filing multiple business insurance claims?

Filing multiple claims within a short period of time is generally a bad idea because it may flag your business as high-risk and potentially result in higher premiums or even policy cancellation. 

What type of insurance protects a business against fire damage?

Commercial property insurance typically protects a business against fire damage to the physical structure of the business, as well as its contents such as equipment and inventory. Additionally, business interruption insurance may cover lost income if the fire forces your business to temporarily close or relocate.

Is an insurance claim for a business taxable?

The tax implications of a business insurance claim depend on the type of claim and the circumstances of the payout. Your business may end up paying taxes from an insurance payout if the payout was significantly more than the damage caused. 


  1. Zippia. “22 Stunning Employee Theft Statistics [2023]: Facts Every Employer Should Know.” Accessed Feb. 25, 2023.
  2. California Department of Insurance. “Commissioner Lara Requires Insurance Companies to Fairly Investigate All Business Interruption Claims Caused by COVID-19.” Accessed Feb. 25, 2023.
  3. East Insurance Group. “10 Most Common and Costliest Small Business Claims.” Accessed Feb. 25, 2023.
  4. Globe Midwest Adjusters International. “The 5 Most Common Business Insurance Claims.” Accessed Feb. 25, 2023.

Get a Free Commercial Insurance Quote.