commercial claims – what you need to know
No one wants to go through a commercial insurance claim.
Whatever the situation, it is never fun to have to file an insurance claim. Necessarily, something has gone wrong. But knowing what to expect and having a team who works with you to support and advocate for you is all the difference.
Depending on the type of loss your business experiences, the duties and responsibilities required by you in a claim can be numerous. It is important to remember that your broker-agent can assist you throughout the claims process. In many cases your broker-agent will be your first point of contact when filing an insurance claim. Whether you contact your broker-agent or the insurance company directly when filing a claim, you are required under the insurance contract to report all claims in a timely manner. This allows the insurance company to process the claim and conduct its investigation as quickly as possible.
Since commercial claims tend to be more complex, it is important for the company to assess the claim quickly in order to mitigate any situation that may have the potential for increased loss. This is especially crucial in liability claims, as there can be high dollar amounts at stake. When claims are not controlled early in the claims process, litigation from third parties can arise. Litigation can be expensive and often ends in a judgment much higher than if an experienced claim representative had handled the claim from the beginning. This is why it is necessary to turn all claims over to your broker-agent or insurance company as soon as you are made aware of the claim. Trying to handle the claim yourself violates your duties under the insurance contract and can be costly to you in the long run.
Most business owners are aware that claims loss experience is reflected in the rating formula and directly affects premium costs. By following the duties outlined in your contract regarding claims, you are a partner with your insurance company in helping to keep claims costs to a minimum, which in turn helps keep your premium costs down.
The better your claims experience, the greater modification allowed to lower your premium. When you first receive your policy, contact your broker-agent to discuss all the duties and responsibilities required by you under the contract.
The deductible on a commercial policy is the part of the loss that you pay up-front before your insurance company pays a claim. Based on the amount of the deductible as stated in your policy, the insurance company will pay up to the limits of the policy when a claim is covered after you have provided the deductible payment. The type of deductible utilized in a commercial policy is referred to as an “absolute dollar amount.” The higher the absolute dollar amount (deductible), the lower your premium.
One of the most effective ways to decrease the frequency and potential severity of claims is through loss prevention and control. Most commercial insurance companies have their own loss prevention departments; however, some insurers rely upon contracted loss prevention services. Usually, loss control services are built into higher risk, higher premium accounts as a part of the entire package of insurance. If you are a small business owner, you can still benefit from proven loss control methods. Based on your type of business exposure, your broker-agent can offer suggestions on how to best control the loss exposures common to your business. The broker-agent along with your account underwriter, claims representative, and loss control representative can create an entire program of loss prevention that includes specific modifications and procedures to follow that can help create a safer workplace. These programs can even include an employee safety program that incorporates awards and suggestions. Getting your employees involved in loss control makes good business sense. Creating a safe work environment benefits everyone. When proven loss control methods are implemented, the public and workers are better protected, and your premium costs go down as your loss experience