When you have your hands full running your small business, it can be hard to give attention to every area that needs it. Filing business insurance claims the right way is one responsibility that is often overlooked. Making mistakes can have consequences — your claim may be denied, or you may experience delays. What follows are nine mistakes that small business owners often make with their insurance claims, and tips on avoiding them.
Neglecting to notify your insurance company right away
It’s important to not drag your feet filing claims, for two reasons. To begin, your insurer needs to inspect the damage when it’s fresh. Both physical evidence and the memories of witnesses can deteriorate over time. Secondly, immediate notification is often a requirement with many business insurance policies. If you take your time, your insurer can legitimately refuse to pay up. If you really have no time to notify your insurance company, you may ask your insurance broker to do the work necessary for you. Delaying is often not an option.
Being careless with documentation
It’s important to keep meticulous records of every communication that you have with the insurance company about your claims. Not only do you need to note down whom these calls are with, and what is said on these calls, you need to record what time and date they take place, as well. If you send paper documents or images to the insurance company, you need to make a note of what date you send these documents in and retain copies of your own. Should the insurance company lose track of your file or misplace document, it could seriously slow the claims process down for you, if you have no backup records.
Failing to work with your insurance company
Insurance companies have detailed claims procedures in place that require compliance. Often, businesses simply don’t have anyone on their staff who can spare the time. Giving the insurance company the go-around when they ask for cooperation is a common mistake, and it can result in delays or in denial of claims. Make sure there is someone designated to give insurance companies required documentation or access to damaged assets.
Neglecting to prevent further damage
When you have damaged commercial property or a damaged commercial vehicle that you are putting in a claim for, you need to make sure that the asset suffers no further damage while you wait for the inspection or for other formalities. If it’s a vehicle that’s been in an accident, for example, you need to make sure that no rain or snow enters through broken glass and damages the electronics or the upholstery. Failing to protect your property from further damage, the insurance company will usually decline to take responsibility for it.
Not calling the police first
With commercial property and auto insurance policies, you must notify the police before you file a vandalism or accident claim with the provider. In many cases, notifying the police can be a legal requirement, as well. When you file your insurance claim, being in possession of a police report that records the details of the damage claimed can help the process along.
Settling third-party claims out-of-pocket
If a vehicle that belongs to your company is involved in a road accident that results in minor injury to people or in minor damage to property, it may occur to you to simply pay for it yourself, rather than go through the long path that you must take to get the insurance company involved. It’s important to remember, that what appears to be a minor injury or minor damage, may develop over time, into major problems. Whiplash injuries, for instance, can take as long as ten days to make their presence felt. If you pay out-of-pocket first, you can’t go to the insurance company later, when these problems turn worse.
Failing to verify your insurer’s calculations
Insurance claims for property and vehicle damage are settled in accordance with the insurer’s calculations of what the damage is likely to cost to correct. It’s important to remember, however, that these calculations may not be relevant to your location. Repairs don’t cost the same in every city. You need to look over your insurer’s calculations and ask a qualified service professional or construction repair firm about how realistic the numbers are. Then, if the insurer’s estimations are too low, you need to contest them.
Voluntarily admitting fault
If you believe that you are the party at fault in an auto accident, you may want to admit it right away in the interests of being honest and sincere. It’s important to remember, however, that most insurance companies forbid you from assuming obligation without their consent. Doing so could be viewed as a breach of contract, and you could be denied compensation. Don’t admit to anything and let the law and the insurance company arrive at their own conclusions.
Neglecting to follow up
Your job is not after filing the claim. Insurance companies can be busy and can drag their feet, sometimes. If things are to move along, it’s important to put someone at your company in charge of the insurance claim that you’re filing, and have them follow up with the adjuster from time to time.
Finally, busy entrepreneurs tend to have little time to read through insurance policy fine print, and are often unprepared for some of the coverage denials that they face when they make a claim. If you wouldn’t sign a business supplier or a purchase contract without reading through the actual wording, you shouldn’t do it for insurance. If you have trouble understanding the dense legalese in policies, you should hire a lawyer for help. The policy shouldn’t go unread, however.
Making a successful insurance claim requires that you carefully follow due process. Mistakes can prove to be costly. Contact a Tampa personal injury lawyer or contact us for a complimentary consultation today.