How to file a claim on your business insurance - 6 tips

When you buy insurance, you hope you’ll never need to use it. But sometimes, the unexpected happens and disaster strikes. At that point, you’re glad you had the foresight to buy insurance. But you also need to know how to file your insurance claim so that you don’t end up paying for damages you’d otherwise be covered for. 

Here’s what you need to know to file a claim on your business insurance policy.

1. Always report your insurance claim immediately – even if you think nothing may come of it. 

Your insurance company can provide you with guidance on filing your claim. They’ll tell you exactly what to do and how to document your claim. So calling them – or notifying them online - should be your first step. Plus, the faster you report your claim, the faster your claim can be assigned to an adjuster, and the faster to the claim can be resolved. That will get you back to work as soon as possible. 

“Get the loss reported as soon as you know,” advises Jason Kunert, Vice President, Claims Manager for Hiscox USA. “Don’t put your head in the sand. You don’t even have to wait until you know there’s a claim. If someone slips and falls in your store, even if they say they’re okay, that’s a good time to report the claim anyway. We can start an investigation, get the video surveillance footage from inside the store before it’s overwritten. By the time you get the letter from the lawyer, that footage may have already been overwritten.” 

Cyber insurance claims can be particularly time-sensitive. “The longer you wait, the more time a bad actor would have to be moving laterally through your system and causing havoc,” says Lisa Jaffee, Assistant Vice President for Cyber, Tech, Media and Crime Claims for Hiscox. “For cyber claims, we have a 24/7 hotline that goes right to a law firm that specializes in data breach response. If it appears that there has been some kind of breach incident or ransomware event, they can loop in forensics or other resources to consult about next steps. Hiscox will also  assign an adjuster who will review the coverage and begin the claim process.”

Related: Claims made and reported insurance policies

2. Leave the evidence alone

If yours is a property damage claim, it’s tempting to try to start repairs right away so you can get back to work. Before you do that, though, make sure you photograph the evidence of the damage for your claim. And let the insurance company know what you’re going to do before you start – they can tell you exactly what documentation they need.

“If you have a property damage claim, don’t throw anything out,” said Kunert. “Don’t rip up the carpet because it’s damaged or throw out that copier that was flooded. Don’t get rid of any of that evidence until the insurance company has had a chance to look at it. Plus, your policy may cover the cost to have damaged items removed and disposed of.”

In the case of a cyber incident, you’re best off letting the insurance company and their experts handle it.  “Sometimes people will inadvertently erase data or erase logs on their system, or try to restore their files from a backup,” said Jaffee. “But doing those things can potentially destroy crucial evidence about the breach. So, it’s really important to speak with an expert first. We can help you move forward without destroying any information that may be needed for the investigation.”

3. Document everything you can

If you are filing a claim, you’ll also want to keep records of any conversations or correspondence that might be pertinent to the claim. Take good notes if you have verbal conversations with another party regarding the claim. Even if something seems like it’s not important, it may become so later on.

“If anything happens while you’re on the scene, take as many notes as you can about the conditions, and about people who may have seen the incident. If there are witnesses, try to get a phone number or email address to provide to the insurance carrier,” said Kunert.

4. Assess the damage

In the case of property damage, make a list of everything that was damaged, and how much it will cost to repair (if possible) or replace it. Keep track of any hours lost from work because of the incident. If you suspect a cyber incident, the damage may not be readily apparent. For example, if an employee tells you they clicked on a link in a suspicious email, the damage from that may not be obvious right away. But the cyber experts your insurance company will engage for you can determine if your system has been compromised.

5. Understand your policy

It’s helpful to understand your policy before you have a claim, but even if you wait until something happens, it’s not too late. Review your policy carefully to make sure you’re aware of any conditions, requirements, or clauses that could affect your coverage. Your insurance company can help you to understand exactly what’s covered and what’s not. 

Your policy will also help you understand your responsibilities when it comes to processing your claim. It should outline what you need to do, and within what timeframe, in order for your claim to be processed. 

Understanding your policy will also keep you from incurring any costs that may not be covered under your policy. “With a cyber policy, we have approved vendors we trust to conduct forensics investigations and data restoration, for example. If you engage your own vendors and incur costs before you talk to us, those costs likely would not be covered,” said Jaffee. 

Related: What are deductibles, limits and endorsements?

6. Work with your insurance company

Stay in contact with your insurance company as you go through the process of filing your claim. Be sure to provide any information they ask for in a timely manner and ask questions if you have them. What happens next? As you might expect, the time it takes to process and pay a claim depends a lot on the type and complexity of the claim. 

For example, suppose a landscaper is mowing a customer’s lawn. There’s a rock in the grass and the lawnmower kicks it up and sends it through the customer’s plate glass window. The landscaper may call a glass company for an estimate right away, and then call the insurance company. According to Kunert, “In a case like this, there’s only one side to the story. The damage happened, no one’s disputing anything, so we just ask them to email us a picture of the damage and the estimate and we’ll send them a check. The whole thing might take a couple of days, start to finish.”

A more complex claim can require witness interviews and investigations, so it will take longer. Some claims, particularly professional liability (or E&O) claims may take several months, if a lawsuit is filed and goes to trial. 

If you have a Hiscox policy, you can report a claim online 24/7. A claims representative will contact you and walk you through the process. Once your claim has been reported, investigated, and paid, you’ll be glad you had the foresight to have a business insurance policy in place. 

Don’t have business insurance yet? Get an instant quote, and your business could be covered today.