Cover Image for Commercial Insurance Claims: 5 Most Common Examples

Commercial Insurance Claims: 5 Most Common Examples

Austin Landes, CIC
12 minute read

Whether you just started a business or have a well-established company, your goals are similar: expanding your customer base, hiring the right employees, and growing your revenue. One thing that probably isn’t on that list is filing a commercial insurance claim—but if you ever have to do this, you’ll be glad you read this article.

What is a commercial insurance claim?

A commercial insurance claim, or business insurance claim, is a formal request you make of your insurance company to compensate you for a loss. Filing a claim begins the compensation process, but doesn’t guarantee whether your claim will be approved or how much money you’ll receive. Your insurance company will first investigate your claim to determine whether it’s covered under the terms of your policy and then assess how much they’ll pay you.

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5 Business Insurance Claims Examples

Businesses typically have multiple types of commercial insurance, including general liability, property insurance, auto insurance, and workers compensation. Here are five examples of the most common claims we see.

1. Storm Damage

Situation: A local bakery was heavily damaged by a hurricane, causing structural damage to the building and ruining most of the baking equipment and inventory.

Policy Type: Commercial property insurance, which covers damage to your building and the property inside it.

Claim Coverage: The business filed a commercial insurance claim and was able to recover funds to repair the building, as well as replace the damaged equipment and spoiled inventory. The bakery also received compensation for lost income due to the business interruption, so it could still pay bills and payroll.

2. Theft

Situation: An electronics store was broken into overnight. Thieves stole thousands of dollars worth of merchandise and damaged the storefront.

Policy Type: This would also be covered under commercial property insurance, which typically includes coverage for theft.

Claim Coverage: The store’s insurance reimbursed it for the value of the stolen merchandise, the repairs to the storefront, and the business interruption during the repair period.

3. Premises Liability

Situation: A customer slipped on a recently mopped floor in a department store and broke her arm.

Policy Type: General liability insurance, which covers bodily injuries to non-employees and damage to third-party property.

Claim Coverage: The store’s insurance covered the customer’s medical bills and ongoing physical therapy, as well as legal expenses when she initially threatened to sue.

4. Auto Accident

Situation: An employee driving a company vehicle rear-ended another car, causing substantial damage to both vehicles and minor injuries to the other driver.

Policy Type: Commercial auto insurance, which covers damage and liability costs resulting from accidents involving business-owned vehicles.

Claim Coverage: The company’s commercial insurance claim paid for repairs to both vehicles and the medical expenses of the other driver, as well as legal fees when the driver initially threatened to sue.

5. Employee Injury

Situation: A construction worker fell from scaffolding at a worksite and broke his leg, requiring surgery and several weeks off work to recover.

Policy Type: Workers compensation insurance, which is required in most states and covers medical costs and wage replacement for work-related injuries or illnesses.

Claim Coverage: The company's insurance paid for the worker's medical bills and ongoing rehabilitation costs. It also replaced the wages he lost from not working during his recovery period.

Commercial Insurance Claims Process

No business owner wants to deal with an insurance claim, but it’s almost inevitable you will face one so it’s important to understand the process. Here are the steps for filing a commercial claim.

Ensure safety

When something unexpected happens, filing a commercial insurance claim probably isn’t the first thing on your mind—and that’s OK. At the moment of the incident, the most important thing is to ensure that everyone is safe and, if necessary, notify the appropriate authorities. If your claim involves a car accident or a crime, like theft or vandalism, it’s always smart to file a police report. Some insurance policies may even require it.

Document everything

Once everyone is safe and the situation is under control, document the incident. Take detailed photos and videos of injuries and property damage, including close-ups and wide shots from different angles. Get statements from witnesses, and write down as much information as you can while it’s still fresh in your mind, including:

  • Time and exact place of the incident
  • Who was involved
  • Specific details about what happened
  • Whether the police were called
  • Any injuries or property damage that occurred
  • Initial expenses, such as immediate cleanup

Do damage control

If there’s damage to your property, you’ll need to clean up and take steps to prevent more damage, like boarding up a broken window, moving undamaged property out of a flooded area or turning off the water supply if a pipe has burst. Remember to keep receipts and records of everything you pay for, like labor and cleaning supplies, because you can include these costs in your commercial insurance claim.

File your claim

Notify your insurance company about the incident as soon as possible. To file a claim, you’ll fill out a form that details what happened and the extent of the loss or damage. (This is where the notes you took earlier will be very helpful.) Be sure to include all the details and attach your supporting documentation, photos and videos.

Wait for review

The insurance company will assign an adjuster to your case who will review your claim, assess the damage and determine the costs of repair or replacement. They might visit your business to inspect the damage or ask you for more information. Some states regulate how long the review process can take. It’s common for an insurance company to have 15 days to approve or deny your claim after they receive your documentation.

Consider your settlement

The insurance company will make a settlement offer based on the adjuster’s findings and your policy’s terms and conditions. It’s important to review this offer carefully. If you believe it doesn't fully cover your losses, you might be able to negotiate a higher settlement.

Receive your payout

Once a settlement is agreed upon, the insurance company will pay out the claim. They’ll typically mail a check within 30 days after the claim is settled, and sometimes faster. You can use these funds to repair damages, replace lost items, cover lost income, or address whatever issues the incident has caused for your business.

Tips For The Best Commercial Insurance Claim Experience

The commercial insurance claims process can be stressful and complex. Here are our top tips to help make sure you have a smooth experience.

Know what insurance you need

You can only start the business insurance claim process for a loss that’s covered under your policy, so it’s important to get the insurance you need before an incident occurs. You can’t predict the future, but you can make reasonable assumptions about the risks you’ll face based on where and how you operate. For example, a construction company may need more extensive workers’ compensation coverage than a professional services firm. Assess your risks and consult with an insurance professional regularly to make sure your policies are up to date.

Purchase quality insurance

The cost of insurance isn’t the only thing that matters when you’re choosing a provider. Not all insurance companies or policies are created equal. Cheaper policies seem appealing but can leave you without coverage when a commercial claim arises. And low-cost providers might not have good customer service, which can leave you in the dark when it’s time to file a claim. Investing in comprehensive coverage from a provider with a good reputation can save you stress down the line.

Learn how to avoid claims

Of course, the best-case scenario is not having to file a claim at all. You can help prevent incidents by regularly maintaining your property, investing in security systems, providing safety training for employees, and following industry best practices. It's ultimately easier, cheaper, and less time-consuming to prevent incidents than it is to deal with a commercial insurance claim.

What To Do If A Claim Was Denied

A claim denial can be discouraging, but it isn't always the final word. Here are some steps you can take if your commercial insurance claim is denied.

Review the denial letter

The insurance company will send you a written explanation of why your claim was denied, and you should review it carefully. Sometimes the denial will be something you can easily fix, like if you didn’t send the proper documentation. Or, it could be something you can argue against, like if the provider is saying your claim isn’t covered under your policy.

Document errors

It’s possible the adjuster misunderstood your claim or made errors in their assessment. You can gather documentation that supports your perspective, like photographs that were overlooked, additional eyewitness statements, or professional estimates that contradict the adjuster’s findings.

File an appeal

Insurance companies have an appeals process for denied claims. To file an appeal, prepare a detailed letter and attach supporting documentation. Be specific, pointing out the reasons given for the denial and explaining why you believe these were incorrect based on your policy terms and the evidence.

Seek legal advice

If your appeal is denied again and you still believe your claim is valid, you might want to contact a lawyer. An attorney who specializes in insurance claims can provide guidance, help you file another appeal, or even take legal action against the insurance company.

The Bottom Line

The commercial insurance claims process doesn’t have to be frustrating. Understanding how it all works and what rights you have can help you navigate the process quickly and get the result you want. You can also take steps to ensure you have the right coverage from an experienced insurance provider with a good reputation.

At LandesBlosch, we pride ourselves on helping you find the best insurance for your business and providing excellent customer service when you need to make a commercial claim. Contact us today to get started.

Austin Landes, CIC

About The Author: Austin Landes, CIC

Austin is an experienced Commercial Risk Advisor specializing in property & casualty risk management for religious institutions, real estate, construction, and manufacturing.

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