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Top 5 common commercial insurance claims and how to handle them

Kim Mercado image
By Kim Mercado
Aug 9, 2021 min read

Why did you decide to become a small business owner? Maybe you had a great idea for a business, or you wanted to be your own boss. Chances are, you didn’t start your business because you wanted to file commercial insurance claims, yet at some point, you’ll have to do exactly that.

An analysis of small business claims suggests that 40% of small businesses submit some kind of insurance claim within ten years of operation. That means nearly half of business owners will experience some kind of event or accident that will require them to have business insurance

Entrepreneurs like you pour their hearts into their business and will do almost anything to turn it into a success. However, if you’re a small business owner working to grow your business, you should make sure to have proper small business insurance to keep you and your business protected from unfortunate occurrences that may not even be your fault. 

5 common commercial insurance claims

It usually helps to be familiar with the most common business insurance claims because the chances are good you’ll have to deal with one of these issues at some point.

1. Burglary and theft

No matter what kind of business you run, you may be at risk of burglary or theft from a petty criminal, an angry customer, or even a disgruntled employee. Out of all business insurance claims examples, burglary is the most common. Roughly 20% of commercial insurance claims are related to burglary and theft.

2. Fire

Small business owners tend to underestimate the likelihood of a fire. There are many common fire causes, some of which they don’t realize until it’s too late.

They also don’t recognize how much time and money it takes to get their business cleaned up and running again after a fire. The fire department, police need time to complete investigations. Insurance companies also will investigate your property claims. Repairs need to happen. All of these things take time.

Fires are capable of causing a substantial amount of property damage in a short period, potentially devastating a small business that doesn’t have insurance coverage.

3. Weather damage

Anything from wind and hail to snow and ice to cold weather freezing pipes can create problems for a business. If there’s a weather-related natural disaster, it can shut down a business for an extended time. 

Data also suggests that over 25% of businesses that close because of a natural disaster never re-open, partly because they don’t have an insurance provider that can help cover the loss. 

4. Customer Injury

Suppose a customer slips and falls while on your business property. You may be vulnerable to a lawsuit and damage claims. If people frequently visit your business, you may want to consider getting general liability insurance. This will allow you to submit an accident insurance claim if someone gets hurt on your property.

5. Struck by object

Believe it or not, people can get struck by random objects, which can lead to trouble if you don’t have proper business insurance. In one of the more unusual business insurance claims stories, a British travel insurer had policies to safeguard against people getting hit by falling coconuts while on vacation. It just goes to show, you never know what could happen.

How the commercial insurance claims process works

In the event your business is affected by one of these issues, the business insurance claims process is usually straightforward. 

The first thing you’ll want to do is contact your insurance provider. You should inform them of the situation as soon as possible. 

You will want to tell them about anything that was damaged or share every detail of the complaint made by a customer. Some insurance companies will require you to call to report a claim. Others, such as NEXT Insurance, will enable you to make a claim online.

When you make a liability claim, your insurer will investigate the claim to confirm what happened. Your broker will then look over your insurance policy to see what may be covered and what may not be covered. Your insurer may also recommend contractors who can help you make any necessary repairs. 

Once the investigation is complete and your policy has been examined, your claims adjuster will let you know when you can expect your commercial insurance claim to be paid out.

My insurance claim got denied — now what?

Unfortunately, not every commercial insurance claims process is simple. Your claim can be denied for several reasons. For instance, if the insurance company suspects fraud or if your policy doesn’t cover the claim. Or, if you didn’t file the claim quickly enough, your claim could be rejected. 

However, there are ways to deal with this before having to take your claims to court. If you have a claim denied, you can write a response letter to your insurance provider that explains why you believe they were wrong to deny the claim. 

To do this, it’s important to keep accurate records of anything relevant both before and after the incident. If you need a little extra help, don’t be afraid to contact a state insurance regulator to guide you through the process. Also, it never hurts to keep following up with an insurance company about a pending claim or to get a clear explanation for why the claim was denied.

Most of the time, you’ll want to avoid going to small business claims court over a dispute with an insurance company. Hiring a lawyer will only add to your costs. Also, there will be no assurance that you’ll win the case. 

Consider working out a deal with the insurance company, even if you have to bring in a state insurance regulator. For a small business, going to court should almost always be a last resort.

Protecting your business with NEXT 

Dealing with commercial insurance claims will never be the best part of being a business owner. Still, it doesn’t have to be difficult either.

NEXT is a one-stop shop for small business owners who need business insurance. We help business owners like you create an affordable, customized insurance package tailored to your exact needs.

Everything is online, so you can get an instant quote, review options and buy coverage in less than 10 minutes. You’ll have immediate 24/7 access to your certificate of insurance (COI) as soon as you buy your insurance.

Get an instant quote today to get started.

Kim Mercado image
By Kim Mercado
Kim Mercado is the managing editor of NEXT's small business blog.
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