3 Important Tips for Filing your Commercial Insurance Claim
Whether the damage is small or large, tangible or not, any business owner in the process of filing a commercial insurance claim faces a good deal of stress. More time and effort is needed to maintain the business while repairs are negotiated with the insurance policy provider.
We encourage small businesses to take a look at policies every 2-3 years to ensure they’re properly covered. Prevention is also key: owners should evaluate possible threats to the business, develop recovery plans, and test those plans all in advance.
Scott Lacourse, a contributing writer for the Boston Business Journal, makes a crucial note in relation to small businesses:
“Many small businesses skip insurance altogether, or fail to get the coverage they need to cope with incidents like major flooding. Almost 40 percent of small businesses never reopen following a disaster, according to FEMA.”
The strength of this data demonstrates the importance of analyzing acquired insurance policies and minimizing the effects of destructive events. However, should an occurrence arise, we’ve put together three tips to help with your next (or current) commercial insurance claim:
Be attentive to coverage policy time periods
If a claim must be made, owners should take considerable care in filing the claim within the temporal parameters set by the insurance provider. Otherwise, extra costs and impediments may extend the amount of time for recuperation.
Below is a chart that outlines the time-based functions of certain insurance policies as they handle declared claims and actual occurrences.
If you have questions specific to your policy, contact your agent. However, rest assured that, as shown above, real occurrences (during the policy period) will most always be covered, “no matter how much later they are reported.”
Take inventory, record documents, and stay organized
The evidence for a claim to be submitted needs to be kept together and controlled. Keeping track of all damage is crucial if these problems are to be resolved efficiently.
Some ways to organize include taking inventory of all materials affected, protecting all documents and copies that may be related to the incident, and even taking pictures or procuring a claim from the police (if the situation is applicable).
It also wouldn’t hurt to stay in touch and follow up with the people involved, especially your insurance adjuster.
Hire a loss management team
In the case of large claims, owners might consider hiring a loss management team.
A loss management team could consist of a professional loss specialist, legal expert, or forensic accountant who would help file the claim. Commercial insurance claims are of a legal nature, after all, and if business owners are not experts in this field, it could help to have someone who is on their side.
This decision, again, would depend upon the severity of the incident that caused the claim and if the owner would find such a support group financially feasible—as it would involve added costs.
Liability Insurance: What is NOT Covered
Most corporations opt for some form of liability insurance, and small businesses are no exception. But if you’re new to the world of risk management, the first question to ask yourself is: what exactly is liability insurance?
General liability insurance – often referred to as commercial insurance – is best described as coverage for damages that the insured becomes legally obligated to pay due to bodily injury, property damage or personal and advertising injury arising from the insured’s premises, operations, completed operations and products. Essentially, for both personal injury and property damage claims, you are covered for related legal fees, costs and expenses.
Important aspects of running a business that is covered by this type of insurance include:
- The cost of legal defense and any settlement or award should an owner be successfully sued;
- Protection against any liability an owner would face as a tenant of damaged rented property.
Some policies can also cover misleading advertising claims, including libel, slander, and copyright infringement.
So what is not covered in your liability insurance plan? Below is a general list of items that are not included in this type of insurance, but will vary by policy.
Employee medical expenses
- Damage to property owned by the business
- Vehicles or employees injured in a company vehicle
- Any damage or injury that involves a person in the company
To summarize, damages to anything owned by the business are not covered; that’s why liability insurance is called a “third party” insurance.
Tips for Selecting the Best General Liability Insurance for Your Business
Understanding the potential risks to your business is a fundamental way to begin this process, because the plan you might need really depends on the type of business you own.
For example, a building contractor faces much higher risks of injury and actual damage to his or her business than, say, a web designer’s business—simply due to the kind of work involved.
Once you have recognized your own business needs, the next step is to fully read the coverage policies. It may seem obvious, but it’s crucial to understand what certain agencies are offering in order to choose the best policy for you.
Something else to consider is the Business Owner’s Policy (BOP), a package deal that most often includes property, general liability, vehicular, and business interruption protection. This option streamlines the process and may cost less than purchasing multiple coverages from different insurers. Again, however, if your business has unique demands that are not covered by an umbrella policy such as the BOP, you may need to invest in additional plans.
If you have any questions regarding liability insurance policies, don’t hesitate to contact a Cleary representative. We’re here to help you protect your business and narrow down the coverages that your company truly needs.
3 Risks that Keep Small Business Owners Up at Night
It’s not easy to run a small business. Business owners face a diverse range of risks-some business-related, but also personal jeopardies such as debt and income loss if things go really wrong. This is understandably stressful as it can leave an air of uncertainty over the future. Technology can also be confusing and might leave a business owner with plenty of questions, such as, what is edge computing? Or which software should I be using for my business? Understandably this can be a difficult field to navigate for any business owner who is not tech savy. Some entrepreneurs might potentially turn to a company similar to Syte Consulting Group or their own trusted advisor to potentially help with managing and planning enterprise resources, to hopefully lessen any future issues.
So what are the highest risks that commonly keep small business owners up at night? An article from Forbes provides some insight; it includes the results from a NFIB (National Federation of Independent Business) “Small Business Problems and Priorities Survey” conducted in 2016.
The top three concerns of small business owners, as derived from this survey, were as follows:
- The cost of healthcare
- Oppressive government regulations
- Federal income tax on businesses
You might notice a theme here. Interestingly, according to this study, nine of the top ten small business challenges are associated with government.
What’s the outlier that’s not government related, you ask? Finding qualified employees.
The cost of hiring new employees
Deciding who to hire is an important process for small business owners, but finding the right people is no easy feat. This is where making bad decisions comes into play. However, nowadays small businesses can make wise decisions in the employment process by taking the advantage of employee background check companies (you can take a look at these guys for more information) and hiring the right talent for their company. Background checks can help small businesses from the probability of hiring an unfit person.
According to a “Small Business, Big Hire” survey conducted in 2016 by Monster Worldwide, “nine-in-ten small business owners (89 percent) identify hiring the wrong person for a job as a risk to the company, with half (51 percent) saying it is a major risk.” Many issues can arise when an employee is not fit for a particular job, including product use errors or customer service mishaps, all leading to a negative impact on company productivity and reputation.
To make matters worse, when you hire the wrong person, you waste the organization’s time and money. One-third or more of these owners estimate wasting over 50 hours of their time and over $1,000 due to their most recent wrong hire. This can eventually lead to providing bad services to clients and in the process losing them.
Often times, wrong hires are really an extension of overlooking historical data points from employee lifecycle, training and on-boarding. Typically, these indicators have served a way forward for employee retention. But when these data-points are retroactively applied to hiring strategies, they can yield the desired outcome. As for collecting said data-points, this can be achieved through customized surveys offered by third-parties (have a peek here for better understanding). That is not to say that existing mechanisms such as assessments, interviews etc don’t matter, rather the infusion of data (both historical and new) can certainly reduce the chances of getting bad hires.
The takeaway? You do have some power over who you choose to work with, which has a larger impact on how the business runs than some might think.
And even if you feel powerless against government regulations, there are a variety of support networks specifically designed for small business owners. Here’s a few of them that you should check out:
U.S. Small Business Administration (SBA)
National Association of Women Business Owners (NAWBO)
National Small Business Association (NSBA)
At Cleary, we believe life is worth the risk. If you’d like to chat with someone about how to better manage your small business, email us here.
