Four Expert Tips for Smoother Insurance Claims

Have you read your business insurance policies lately?

If you answered no, we understand. Not exactly light reading. But when a disaster hits, knowing a few key things about your business insurance can make a BIG difference in recovery time and costs.

Here are four tips for smoother insurance claims:

1. Understand Your Insurance Policy
It’s important that at least one person in your company has a solid understanding of all current insurance policies. This is critical because once a loss occurs—everything that happens from an insurance perspective is dictated by policy language. Nothing else matters. Put another way, insurance is about the contract, not sympathy.

To keep your business operating, you need to get the claims process moving along. And to make things as smooth as possible, you need to know both what’s expected of your company and what your policy actually covers. Otherwise, you may be blindsided with unanticipated expenses or face costly delays. For example, practically every policy includes a provision stating that it is the duty and obligation of the insured to secure the property and prevent further damage after a disaster has passed. If you don’t act quickly enough and further damage occurs, you may end up footing a hefty bill. This scenario is not uncommon in storm-related disasters. Say wind damages a section of your roof and you fail to cover the damage before a big rainstorm moves in a couple of days later. You would likely end up paying for any water-related damage.

Keep in mind that while you may be able to turn to your broker for insights and advice during one-off disasters, he or she may be pulled in 100 different directions during an area-wide event. So knowledge is a big advantage to getting things done quickly in those situations.

2. Keep Detailed, Organized Business Records
Take it from most business owners who have ever navigated a disaster: keeping cash flowing after a disaster is key to a quick recovery and even survival. And having your records in order can help you get much-needed insurance checks sooner.

Insurance companies pay claims based on key business details that you give them. And it’s important to remember that for insurance adjustors, the devil is in the details. Really. For example, for a business interruption claim adjustors will want to review at least three years of financial records. Adjustors use your records to calculate sales trends, understand your expenses and more. So the easier you make their job, the faster they can respond.

And it’s not just financial records. If you lease a building, the insurance company will want to know what you are responsible for and what the building owner is responsible for, so you will need to provide a copy of the lease. Detailed and current records of real property, including inventory of equipment, fixtures, furniture and supplies within a structure, are also important.

Also be sure to account for specialty equipment or supplies. It’s important for adjustors to clearly understand what a long lead time for repairs or replacement could mean to your business.

3. Assign a Single Point of Contact, When Possible
While it may not always be possible, ideally limit the number of contacts your insurance company needs to deal with. Fewer contacts for the insurance company can reduce confusion and miscommunications on both sides, helping you to keep things moving faster. Depending on the type of disaster, however, some designated point people may not be able to speak to a specific part of a claim. For example, if a facilities leader needs to respond to a business interruption claim. At the very least, try to funnel decisions that must be made by a committee through a key contact, when you can.

4. Find Your Service Providers Ahead of Time
This last tip is important because when a disaster does strike, you may need to move quickly. Remember back to the point in the “Understand Your Policy” section regarding your obligation to secure your property after a disaster and how that could impact your business. Or for an area-wide disaster, keep in mind that lots of other business will be looking for service providers at the same time. So if you don’t know who to call and you’re having trouble lining up help, you will potentially face rapidly escalating costs and headaches. That’s why it’s a good idea to reach out to the types of service providers that could play a key role in your ongoing operations before you need them.

Fast-tracking Your Return to Business
Beyond buying policies, businesses often give little thought to their insurance, although insurance is a huge part of disaster planning, risk avoidance and business recovery after an unfortunate event. But take it from experts, knowing what your insurance covers and how to work with your insurers can make a huge difference in recovery time and costs. So at the very least, be sure you understand your policies.