Claim

A claim is a formal notice to an insurance company that you have suffered a loss that you believe entitles you to compensation.

Once you file a claim, your insurance company is required to investigate it and then compensate you for the financial harm you suffered, assuming the payment is warranted under the terms of the insurance policy.

There are many types of small business insurance claims. Broadly speaking, they fall into the following areas:

• Property damage
• Liability
• Business interruption
• Bodily injury
• Disability (workers’ compensation)

Claims occur in all forms of insurance since that’s how insurers pay insureds for covered losses.

Follow your insurer’s claim procedures, which you can find in your policy. Typically, the first step is to inform the insurer of your loss over the phone or via the insurer’s website.

Be prepared to provide full details about the incident:

• What happened?
• When did it happen?
• Who was involved?
• Were the police on the scene?
• Was anyone injured?
• Was any property damaged?
• What initial expenses have you incurred?

Once you file your initial claim or loss notice, be prepared to complete additional forms and provide supporting information such as property damage estimates.

Depending on the nature of the incident, you may need to take additional steps, such as submitting a police report (for commercial auto insurance claims) or doctor’s statements (for workers’ compensation insurance claims).

Insurers have specific procedures for adjusting claims (i.e., for reviewing, approving, and issuing claim payments).

Once you file a claim, your insurer will assign a claims adjuster (also called a claims service representative in some companies) to your case. This person will be your point of contact during the claims process. If you have any questions or concerns, be sure to contact this person.

After reviewing the facts of your case, your adjuster will determine if your loss qualifies for payment under the terms of your policy. If so, the adjuster will send you a check.

Insurers must comply with the claims requirements of their state’s insurance statutes. This involves working with claimants (insureds and other parties who are requesting claim payments) fairly and in good faith. Some specific duties include:

• Handling the matter in a reasonable amount of time
• Settling claims equitably under the terms of the insurance policy
• Not denying claims without due cause
• Providing reasons for claim denials
• Providing a process for consumers to appeal claim denials

If you’re unhappy with your insurer’s claim payment or denial, review your options in the claim denial documents included with your policy or the insurer’s website.

For many types of insurance, state insurance departments provide assistance with claim disputes. Check your state’s insurance department website for information on appealing an insurance company’s claim decision.

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