You’re not likely to hear lighthearted, fun talk when discussing filing insurance claims, but with some preparation and a good provider, it doesn’t have to be difficult. We know the hustle of the small business owner and we understand that the last thing you need is to add extra stress or items on your to-do list. Don’t worry. You can help make claims filing a fairly seamless experience if you’ve got all of your bases covered. Here’s what small businesses really need to know about filing insurance claims.
What to Do Immediately
First and foremost, you need to address any dangers. Take immediate action to treat any emergency injuries or mitigate dangerous situations. Your safety and the safety of those around you should be your first priority. As much as is possible, don’t disturb any of the damage, but always remember that safety is the first priority. Notify any emergency services and move away from potentially dangerous circumstances.
Know Your Policy and Its Limitations
Business insurance can take many forms. Although you’re likely covered with a general liability policy as a course of business, this doesn’t cover all eventualities. A general policy may not cover certain types of property damage or loss due to theft. Additional expenses that you may incur as a result of business interruption or any loss of data may also not be covered under your policy. Work with your insurance agent, ask questions and be clear on what your policy actually covers—and make sure you understand the fine print. (In the event that you’re lacking critical coverage, figure out what additional policies you may need.)
Contact Your Insurance Agent
It’s a good idea to get your insurance agent involved as soon as possible when a claim arises. This prevents any contamination of the damage by outside forces. This can also help to limit further theft or damage. Say, for example, that a theft occurs and that the perpetrators knocked out the windows in your building during the incident. Waiting may encourage further theft or destruction before any efforts can be made to tighten up security. Moving ahead too quickly may make reimbursement difficult if that goes against claims procedures. It’s best to get guidance from your agent as soon as possible.
Start the Claims Process
Contacting your agent likely jumpstarts this process for you. They may direct you to a claims form or request documentation or photographic evidence of the damage. Either way, make sure you get a claims number and a copy of the report for your records. This helps to identify any discrepancies immediately and serves as a reference should any issues come up during the claims and reimbursement process.
Also, this generally marks the beginning of the business continuity period where you can begin to take measures to repair damage and make your business functional again. (Check out our article for more on business continuity after an incident.)
Take Inventory
This is where you need to be as meticulous as possible. Figuring out the entirety of the damage may take time and diligence. The extent of what is missing or broken may not even be apparent on your first round. For this reason, it can be helpful to take pictures of the affected areas from multiple angles to ensure nothing gets missed. Make sure to do a thorough inspection of the inside and outside of any structures. Check all equipment and vehicles for signs of damage and make sure to do a full review of inventory and supplies.
Get Your Documentation in Order
Documentation is definitely your friend during the claims process. Here are the different types of documents you’ll want to gather.
General Information
- Policy documents: Review your insurance policy and any amendments.
- Claim form: Obtain the insurance company’s claim form and fill it out completely. Be as thorough as possible.
- Communications with your agent: Keep a log of all communications with agents and necessary parties so that you have a record of what was communicated regarding your claim.
Incident Details
- Description of incident: Write a detailed account of what happened, including the date, time, location, and circumstances of the incident. This may not seem like an immediate priority, but details can become fuzzy over time. Documenting everything you know can be a helpful during the claims process.
- Police or fire reports: If applicable, obtain official reports from the police or fire department. If notified, these entities will likely supply you with the necessary documentation.
Proof of Loss
- Inventory list: Provide a detailed inventory of damaged, lost, or stolen items. Include descriptions, purchase dates, and values. This can be quite the undertaking if you’ve had extensive damage, but it will benefit you to be as precise as possible.
- Receipts and invoices: Gather receipts, invoices, and any other proof of purchase for the items claimed. This can help to ensure you get full value for all of your business costs.
Financial Documentation
- Business records: Maintain up-to-date financial records, including profit and loss statements, balance sheets, and tax returns. This may be helpful in determining the full value of your loss.
- Repair estimates: Obtain written estimates for repair or replacement costs from contractors or service providers.
- Sales records: For business interruption claims, provide documentation of your sales before and after the incident to demonstrate the loss of income.
Review Your Settlement Offer
Make sure to review the details of your settlement offer with a fine-tooth comb. It’s important that you feel you will be fairly compensated for damage and loss of revenue that results from the incident. If you are unhappy with the offer, you can negotiate terms or appeal the process.
Regardless of what incident your business is facing, make sure to stay calm, remain organized and stay on top of the claims process. Hopefully, you’re in for a smooth process!