When to File a Business Insurance Claim

As a business owner, you protect yourself financially from certain damages and liabilities by getting business insurance. Since you’re paying for the coverage, it only makes sense to file an insurance claim if you experience a situation that is a covered loss, right?

Not necessarily. You shouldn’t file a claim for every circumstance. There are things that you need to consider before filing a business insurance claim.

Why should you file a claim?

Here are some reasons why you should file a claim:

  • If the event resulted in temporary cessation or relocation due to repairs and it’s costing your business considerable lost income, filing an insurance claim helps keep the business afloat.
  • Some policies have an aggregate deductible where the insurer won’t pay anything for a claim until it is met during the year. If you do not file a claim, it only means that you are further putting off collections on any claim during the term.
  • Liability claims should be filed immediately in order to give the insurance carrier as much time as possible to prepare the appropriate defense.

Why shouldn’t you file a claim?

Here are the reasons to consider not filing a claim:

  • Your claims history will follow you for up to 7 years even if you think of switching insurers.
  • Claims that involve water damage may be a factor when insurers decide not to renew policyholders. Why? Because water damage may cause mold, which can be very costly to repair and can even recur.
  • The amount needed to address the covered event may not be more than your deductible.
  • Filing a claim for your business may be difficult. There may be fees involved in documenting the cause and effects of the damages.
  • While filing a claim may not always cause an increase in insurance premiums, it is a possibility.
  • If there’s a maintenance issue that caused the loss, it would be wise for you not to claim because it is likely to get rejected.

When should you file a claim?

As soon as you’ve considered all the factors and decided to file a claim, it would be best for you to review your policy again and ensure that you are completely covered against the threats to your business. After that, you should call your insurer as soon as possible.

Before making permanent repairs, you should wait until your insurer advises you to. With that being said, you should always make temporary repairs to prevent the damage from worsening.

For those who want to file business interruption claims, you must have proof of income generated before and after the loss, including relocation expenses to a temporary location.

Here at Wellcovered Insurance Group, we offer you dependable insurance coverage that is tailored according to the needs of your business. To know more about this, feel free to call us at (386) 218-4951 or visit us at our office and get a quote now!