If you know the right insider tips in any industry, your business is bound to benefit. And while I might not be able to give you your competitor's marketing plan for the next year or predict exactly when the next construction boom will hit, there is some insider information I can share with you about the initial steps your business should take when faced with the (usually dreaded) situation where you have to dust off and use your insurance. Working for years in a law firm that caters to both business clients and insurance companies, I know that, much like a seasoned football coach, the insurance companies have a predictable playbook when reviewing insurance claims. I also know that there are certain steps you should follow to avoid falling into the most common traps that can leave you without coverage for your loss.
1. Don't Wait. The day you learn of damage your business has suffered or of a potential claim being made against you, whether from an employee, contractor, or any other source, should be the day you put your insurance company on notice that you might need to use your coverage. The longer you wait to notify your insurance company, you give your insurance company more leverage to deny payment. I know there are a number of business decisions that must be made in regard to filing an insurance claim - like whether a claim would cause future premium increases or whether the economics of the deductible make the claim worthwhile - but you cannot allow those considerations to delay your contact with the insurance company. You can always withdraw your claim prior to the insurance company;s payment, and you simply don't want to put your business in the position where it needs coverage that is ultimately denied because you waited too long to send your notice.
2. Read your policy. If your business is like most, your insurance agent has sold you a number of insurances policies, and each policy provides you coverage for different types of damage or loss. That means that in the event you have to make an insurance claim, you need to figure out which of your insurance companies provides the coverage you need for the specific loss you face. While this won't be the most popular advice, the best way you can truly make the determination as to which insurance company you need to involve is to read your policies. The "definitions" and "coverage" sections will give you a snapshot of the coverage available under a specific policy, but your careful review of all the policy provisions will also outline your other obligations to successfully present your claim. Your agent and your attorney can assist in this review, but often there is no substitute for reading and understanding the coverage limits and requirements yourself.
3. Preserve all documents and evidence. Regardless of the type of claim you need to make, and whether you have photographs of damage, witness statements, or electronic documents, one of your immediate (and ongoing) obligation is to make sure that all documents and evidence relating in any way to your loss are preserved. The insurance company will usually not hesitate to deny your claim if you cannot review the matter for itself through preserve evidence.
4. Keep your business going. Even though your attention is diverted and inconvenience abounds when you have to start the process of filing an insurance claim, one of your other key obligations is to make sure the loss your business suffers does not get any worse. To the extent you can work around the problem and continue with business as usual, you should. Your insurance company will start to reduce or deny your claim if you do not make your best effort to minimize damage and get back to doing what you know best, even if only in a reduced or modified way.
If you keep these four key steps in mind when faced with the unenviable task of filing and insurance claim, you will have the insider's insight to eliminating common obstacles to getting your insurance company's full help.
By: Heather Marx, Partner with the national law firm of Hinshaw & Culbertson, LLP.
Source: Damage Prevention PROfessional Magazine (free subscription- print or online)
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