How to file a business insurance claim

Call your insurer the day something happens, before you know whether it’s covered and before anything gets cleaned up or repaired. That one habit settles more claims than any argument you could make later, because most policies ask for notice “as soon as practicable,” and an adjuster can only weigh the damage, the scene and the witnesses that still exist when the file opens.

The rest is order. Make the place safe, photograph it, report it, send what you’re asked for and write down every call. Don’t admit fault, don’t pay anyone out of your own pocket and don’t throw away the broken thing, however much you want it gone.

Safety first, then pictures

Paperwork can wait an hour, but a running leak can’t, and your policy agrees. Call 911 if anyone is hurt, shut off the water at a split pipe, tarp a broken skylight and move stock out of the path of a leak, because property policies usually include a condition asking you to protect the property from further damage after a loss, and a leak that keeps running for a week after you noticed it is a far harder conversation than the first night’s water.

Keep every receipt for that work.

A plumber’s call-out, a board-up service or a rented fan is usually treated as part of the loss, subject to your policy’s terms, so the money you spend in the first few hours isn’t wasted even if it feels that way at 2 a.m. Then take pictures, more than you think you need: the damage up close, the cause (the split fitting, the wet floor, the pried lock) and the wide view of the room, shot before anyone mops or sweeps.

Don’t throw anything out yet. A ruined salon chair, a cracked espresso machine or a box of water-soaked stock is evidence, and the adjuster may want to see it, so set it aside, photograph it and ask before you put it on the curb.

The steps, in order

1. Write down what happened while it’s fresh. The date, the time, the place, who was there and what you saw. Short and factual beats long and emotional.
2. Photograph and film it, as above. Before cleanup, every time.
3. Find your policy. Your declarations pageDeclarations pageThe declarations page is the summary at the front of an insurance policy listing who’s insured, what’s covered, the limits, deductibles, premium and policy dates.Read the definition shows the policy number, the limits and the deductibleDeductibleA deductible is the amount you pay toward a covered loss before your insurance pays, usually subtracted from the claim payment.Read the definition. If you can’t tell which policy applies, report it anyway.
4. Report it to your insurer. The same day if you can, even if you still aren’t sure it’s covered.
5. Report crimes to the police. A break-in, a theft or vandalism needs a police report, and the insurer will ask for the number.
6. Send what the insurer asks for. Receipts, invoices, repair estimates, sales or payroll records and, on many property claims, a signed, sworn proof of loss. Policies that ask for one often set a deadline for it, so ask what it is and put it on the calendar.
7. Keep a claim log. Every call and email, with the date, the person and what was agreed. Keep copies of everything you send.
8. Check the outcome against your policy. If something doesn’t add up, ask about it in writing.

Step 4 is where owners go wrong.

Why “as soon as practicable” is a trap

Here’s where most claims are won or lost. Many business policies don’t give you a fixed number of days to report a loss; they ask for notice “as soon as practicable,” and some ask you to report any occurrence that might lead to a claim, which is a wider net than a claim itself. That soft wording feels generous. It isn’t, because what counts as practicable gets judged later, by someone reading your file after the fact, and the gap between the day it happened and the day you called is the first thing they’ll notice.

Claims-made policies are stricter still, and professional liability and cyber are often written that way. A claim usually has to be reported during the policy period or a short window after it ends, and a late report there can mean no coverage at all, whatever the reason.

Owners delay for reasons that sound sensible at the time. The damage looks small and might fit under the deductible. The customer who fell said they were fine. You want to get a contractor’s estimate first so you know what you’re asking for, or you aren’t sure the loss is covered and don’t want a “claim” on your record for nothing. Every one of those reasons trades a known, small cost (a phone call and a file number) for an unknown and possibly large one, which is a claim that arrives months later with no photos, no witnesses, no saved video and a question about why nobody heard about it sooner.

Reporting and demanding money are two different things. You can tell your insurer what happened, say you don’t know yet whether you’ll claim and let them open a file, and if the loss stays small you can decide later how to handle it. The insurer is far better placed to sort out which policy responds than you are, too, since one burst pipe can touch commercial property for the stock and business income for the days you’re closed.

It can feel like overkill, but report early anyway. The worst outcome of an early call is a file that never goes anywhere.

What to collect for each kind of claim

Say a pipe bursts in a store overnight and the morning shift finds an inch of water across the stockroom. What wins that claim is a plumber’s invoice naming the failed fitting, photos of every shelf, a list of the ruined stock with what it cost and the cleanup receipts, and if the store has to close, the sales records that show what a normal week looks like. Each kind of loss has its own version of that pile.

An employee who’s hurt on the job is a workers’ comp claim with its own deadlines, covered in what to do when an employee is hurt at work. A breach has its own order of steps, because the wrong first move can destroy the evidence, so read what to do after a data breach before you touch the machines.

What not to do while a claim is open

Most of these mistakes come from trying to be helpful.

• Don’t admit fault or promise to pay. “I’m sorry this happened” is fine. “That’s on us, we’ll cover it” can make a liability claim harder to defend, and liability policies typically give the insurer the right to handle settlement.
• Don’t settle or pay on your own. A payment you make without the insurer’s agreement may not be reimbursed.
• Don’t sign releases or statements from the other side before you’ve talked to your insurer.
• Don’t sit on mail. A demand letter or court papers often come with a deadline. Forward them the day they arrive.
• Don’t make permanent repairs before the damage is seen, unless waiting would be unsafe or cause more damage. Photograph first, and tell the insurer what you did.
• Don’t post about it. What you write online about an incident can be used in a liability claim.

Who’s on the other end of the phone?

Once you report a claim, someone at the insurer, usually called an adjuster or a claims specialist, takes the file. They read the policy, ask for documents, may inspect the damage and decide what’s covered. On a property or business income claim you’re the one proving the loss, so expect to send numbers, while on a liability claim the insurer typically deals with the person who’s claiming and, if it turns into a lawsuit, may hire a lawyer to defend you, subject to the policy’s terms and limits.

Good questions for the first call:

• Which policy and which coverage part does this fall under?
• What documents do you need from me, and in what form?
• Does a deductible or a waiting periodWaiting periodA waiting period is the stretch of time after a covered loss before coverage, such as business income, starts paying, working like a deductible measured in hours or days.Read the definition apply, and how much or how long?
• Can I start repairs now, or do you need to inspect first?
• Who will I hear from, and how often?

With Corgi, one claims specialist handles your claim from the first call until it’s closed, so you aren’t telling the story again to someone new every week.

If you disagree with the decision

Start by asking the insurer to explain the decision in writing and to quote the policy wording it relied on. Plenty of denials and low offers come down to a missing document, like a sales report for a business income claim or an invoice for a piece of equipment, and sending it settles the matter faster than any argument would.

If that doesn’t resolve it, ask what the policy’s dispute process is. Some property policies include an appraisal clause for disagreements about the amount of a loss, as opposed to whether it’s covered at all, and that distinction matters, because an appraisal can’t make the insurer pay for a loss the policy excludes. Your state’s insurance department also takes complaints about insurers, and the NAIC keeps a directory of state insurance departments with a way to find yours.

Most stalled claims share one thing, and it’s a file with holes in it: a late report, no photos, a repair finished before anyone saw the damage, or records that can’t show what a normal month looked like. Each of those is fixable on the day of the loss, but almost none of them can be fixed six weeks later.