When filing insurance claims as business owner can be dreary, tedious and confounding, especially for new entrepreneur. The necessities and risks of businesses change considerably more than individual lines insurance products. Likewise, entrepreneurs frequently consider ““insurance director” one of the many, numerous caps they wear every day.
After a disaster or accident, it’s important to file your claims correctly. When businesses fail to file a claim, they might not get the full reimbursement or no payment at all. One essential aspect is making sure you have the right type of insurance coverage with protection specifically designed for your business.
Sometimes, there could be a delay in payment for your indemnity . To avoid these troubles, make sure that you take the time to correctly and adequately file your claims.
Most common mistakes Business owner make when when filing a claim
Failure to contact your insurance company immediately
Insurance rule state that , you should inform your insurer of any accidents or claims when practicable .Don’t hold up until after you’ve cleaned up.Many people wrongly clean up damage before an insurance representative visits the business scene. This makes perplexity about how awful things truly were. In a disaster situation, many insurers have a quick-response team that will come out to survey the situation.
All the information you provide to your insurer is important, and often you cannot make a successful claim without it. For their purposes, however, insurers may be particularly interested in the details of the incident and the details of the other and their insurer.
When an accident or loss occurs, document the scene with a camera if you can do so safely. Take photos of your damaged property before you started your cleanup effort. Submit the pictures to your insurer when you file your claim. The photos can help verify your written description of the events and damaged property.
Poor record-keeping on your part may delay your recovery for a claim.To ensure that you get as much as you can from a claim, document the damage. Sometimes it is impossible to wait to begin the cleanup and repairs.
Admitting Liability In An Accident
Immediately after the accident, the best thing you can do is gather as much information as possible. While it may be obvious who is at fault, you will need to provide your insurance company with clear evidence if you want their support.
Don’t admit liability. There are several reasons for this. For one thing, the cause of the accident may be different from what you think. The accident may have involved factors that weren’t apparent when the incident occurred.
Regardless of who is to blame, you should always inform your insurance company, broker or claims advisor straight away if you are involved in accident or damage to your property. Bear in mind that many insurers will have a time restriction for reporting an accident, and if you fail to inform them within the timeframe stated in your contract, your policy may no longer be valid.
Even if you feel that you were responsible for the accident, you shouldn’t make an admission at the scene. A business owner is not legally obliged to admit that they are liable, so make sure you’re not pressured into doing so, and avoid pressuring other into doing so even if you feel they are at fault.
Most car insurers will advise you not to admit liability at the scene as it could invalidate the policy. Even if you think it is the right thing to do, it’s still better to let the police investigators and insurance companies consider all the evidence first to decide who was at fault and take an appropriate course of action.
If you do admit that you are at fault verbally, your insurance company can still say you have admitted nothing if it is not in writing. However, bear in mind that someone could quote you if you are asked to stand in court, and your admission at the scene
Not Understanding Your Policy
Claim on indemnity can sometimes be confusing or difficult to understand, it’s imperative that you are aware of what your policy includes. if you have insurance for a building, you must have coverage that will help you recover from loss or damage for flooding, earthquakes and all other possible along with flood insurance policy.
Review your policy again before you file a claim. Be sure you understand the duties you are obligated to fulfill to obtain payment for a loss.
Not Appealing Your Insurer’s Calculations
No matter how your damaged property is valued, you should obtain realistic estimates of the cost to repair or replace it. Don’t assume that your insurer’s estimate of these costs is accurate. Repair and replacement costs vary widely from place to place.
Sometimes your insurer will give a low estimate for the damage. If you feel like it’s too low, you can always appeal the estimate. You can hire your own adjuster to give an estimate. You may need to have a third-party mediator to negotiate the final amount. However, in the event of a big disaster, appealing an estimate can be huge financial help.
Material fact NON-Disclosure/Utmost Good Faith compromised
This is an issue that can easily jeopardise your insurance coverage claim. The word ‘material’ means ‘relevant’ or ‘pertinent’, so it’s about what is relevant to the insurance contract. What’s in question is whether the insurer would have assigned a different risk level to your coverage had the insurer known pertinent information. Consider: would they have even accepted the risk at all?
The principle of Utmost Good Faith had been compromised, this time from the client.
Utmost Good Faith can be defined as ‘a positive duty to voluntarily disclose, accurately and fully all facts material to the risk being proposed whether requested or not’. In insurance contracts, Utmost Good Faith means that ‘each party to the proposed contract is legally obliged to disclose to the other all information which can influence the other’s decision to enter the contract’.
Insurance companies take non-disclosure of information into serious consideration when underwriting policies, therefore, the need to state the fact on everything ab initio. This will help the insurer to quote the right premiums and also indicate whether the life to be insured is worth accepting as a risk or otherwise.
Many times, the insured has a greater knowledge about himself / herself when proposing to have an insurance policy. Since insurers need to have such information to determine the insurability of the person(s) and the rate to charge, the client is required to provide it.
If in the event of a loss the insurer finds that information to be false, claims could be repudiated or subjected to a cumbersome process before being considered, if at all.
Utmost Good Faith, also known as ‘uberrimae fidei’ or ‘let the buyer beware’, applies to the buyer as well. In this case, ‘let the seller (insurer) beware’. Akin to disclosing your exact medical condition to a medical doctor in order to obtain the most appropriate treatment, there is the need for absolute honesty or else insurance could suffer an economic setback to the client, as well as the insurer.
As a purchaser of commercial insurance, you have a duty to disclose every material fact that you know, or ought to know, about the risk. A material fact is something that would affect the judgement of an insurer in deciding whether to accept the risk and on what terms – at inception, renewal and on variation of the policy. This information must be disclosed in a clear and accessible manner, after all necessary enquiries have been made, to ensure that the information provided is both complete and accurate.