How to File a Business Insurance Claim: Steps, Deadlines and Disputes

Get people to safety and call emergency services first. Documentation can wait until the scene is safe.

Serious workplace injuries can trigger a separate government report. OSHA says "all employers are required to notify OSHA when an employee is killed on the job or suffers a work-related hospitalization, amputation, or loss of an eye." A fatality must be reported within 8 hours. An in-patient hospitalization, amputation or eye loss must be reported within 24 hours. Many states run their own occupational safety programs, so check which agency covers you. OSHA reporting requirements. An OSHA report is not an insurance claim; you still need to notify your insurer.

The CDI's commercial insurance guide says that in many cases your broker-agent will be your first point of contact when filing a claim. It adds that "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." CDI commercial insurance guide.

Your policy's exact notice terms are in its conditions, which the same guide defines as the portion of the contract that "sets forth the rights and duties of the insured and the insurer." CDI commercial insurance glossary. Find the claims phone number or portal in your policy documents, and read those conditions. When you call, have this ready:

• Policy number and the named insured.
• Date, time and location of the incident.
• A factual description of what happened.
• Names and contact details of anyone injured or involved, and of witnesses.
• Police or incident report numbers, if any.
• Photos, videos and a first list of damaged property.
• Any demand letter, complaint or lawsuit you have received.

Write down the claim number, the name of the person you spoke with and what they asked you to do next.

Reporting points by coverage

The FTC also notes that all states, the District of Columbia, Puerto Rico and the Virgin Islands have laws requiring notice of security breaches involving personal information. Ask counsel which notices apply to your breach. FTC data breach response guide.

NAIC consumer guidance written for homeowners after a disaster sets out the order of work: "Before removing any debris or belongings, document all losses. Take photos or video and make a list of the damages and lost items." It also suggests saving damaged items "so your insurer can inspect, if necessary." NAIC homeowner claims guidance. Use the same order for business property.

Records made before a loss make this easier. For business equipment, the IRS points to its business loss workbook (Publication 584-B) for listing equipment. It says such a list "will help you recall and prove the market value of items for insurance and casualty loss claims." It also suggests photographing or videotaping business contents, "especially items of greater value." IRS disaster preparation for businesses.

FEMA's checklist for flood policyholders is another useful model. It asks policyholders to record the make, model and serial number of appliances, electronics and other valuable items, and to list damaged items with descriptions, values, quantity and approximate age. It also suggests separating damaged property from undamaged property so the adjuster can inspect it. FEMA NFIP claims checklist.

For an injury or liability incident, write a factual incident report while memories are fresh. Photograph the scene and collect witness contact details. Keep any equipment or product involved; do not repair or discard it until the insurer has had a chance to inspect it.

For a cyber incident, the FTC says: "Don't destroy any forensic evidence in the course of your investigation and remediation." FTC data breach response guide.

To prepare for the next loss, see how to organize property records before a loss.

Take reasonable steps to stop the loss from getting worse, and check your commercial policy's conditions for any specific duty to protect property after a loss. NAIC consumer guidance written for homeowners suggests making temporary repairs, "such as covering a hole in your roof or boarding up broken windows," and says to "keep a record of all receipts." NAIC homeowner claims guidance. The Texas Department of Insurance (TDI) gives similar advice in its guidance for home and car claims: cover damage with a tarp or make temporary repairs. TDI home and car claim steps.

Photograph the damage before you make temporary repairs. Before signing a contract for cleanup or permanent repairs, ask your insurer or adjuster how the work will be handled. FEMA gives the same caution for flood claims. FEMA NFIP start-a-claim guidance.

For a computer breach, the FTC says to "take all affected equipment offline immediately — but don't turn any machines off until the forensic experts arrive." FTC data breach response guide.

The CDI's commercial insurance glossary defines a claim adjuster as the person who "evaluates the damage caused by a covered loss and determines the amount to be paid under the policy terms." An independent adjuster "provides claim adjusting services to different insurers on a contract basis." CDI commercial insurance glossary.

TDI's general consumer guidance, written about home, car and property claims, explains that "the adjuster works for the insurance company paying the claim." The adjuster may inspect the damage, review police reports, talk to witnesses or ask for more information. TDI suggests being present at the inspection, getting the adjuster's contact details and asking when to expect the insurer's offer. If you cannot work things out, you can ask the insurer to assign a different adjuster. TDI on working with an adjuster.

Answer requests accurately and promptly. If you do not know an answer, say so rather than guessing. Send copies, not originals, and keep a record of what you sent and when.

FEMA's flood checklist suggests keeping "a log of all conversations" with your insurer, adjusters and contractors, including the date, time, name and topic. FEMA NFIP claims checklist. The same log works for any business claim.

For a workers' compensation claim, stay in contact with the claims administrator about the employee's return to work. California's DWC tells employers to "provide transitional work (light duty) whenever appropriate." California DWC employer FAQ.

Your insurer may ask for a formal proof of loss, a statement of what you are claiming, along with supporting documents. Check your policy's conditions for any proof-of-loss requirement and deadline, and ask the insurer in writing which forms it needs and where to send them.

The NAIC's model claims-practices law lists failing "to provide forms necessary to present claims within fifteen (15) calendar days of a request" as an unfair claims practice. It also treats as unfair an insurer unreasonably delaying a claim "by requiring both a formal proof of loss form and subsequent verification" that duplicates it. States adopt their own versions of this model. NAIC Unfair Claims Settlement Practices Act model.

Deadlines can be short. For flood claims under the National Flood Insurance Program (NFIP), FEMA tells policyholders to submit all required documentation "within 60 days of the flood, or within the timeframe your adjuster or insurance provider provides." FEMA NFIP claims checklist.

Typical supporting documents include repair estimates, invoices and receipts, inventories, photos and, for lost business income, financial records that show revenue before and after the loss. The NAIC notes that a business owners policy typically includes business interruption coverage, so check that section of your policy for its own documentation terms. NAIC small business insurance. If you need more time, ask for an extension in writing before the deadline passes.

Check who the payment will go to. The CDI's commercial insurance glossary describes a loss payable clause as a provision that "authorizes the insurer to make a loss payment to a person, company, or organization (loss payee) other than the insured." Its examples include a lienholder on business personal property or a mortgagee on real property. CDI commercial insurance glossary. Ask your insurer whether a lender or other party will appear on your payment.

States set claim-handling standards. The NAIC's model act lists unfair claims practices that include:

• Failing to acknowledge claim communications "with reasonable promptness."
• Refusing to pay claims "without conducting a reasonable investigation."
• Failing to affirm or deny coverage within a reasonable time after completing the investigation.
• Failing to promptly provide "a reasonable and accurate explanation of the basis" for a denial or compromise offer.

The model is not intended to cover workers' compensation claims, and each state writes its own rules. NAIC Unfair Claims Settlement Practices Act model.

Texas example, for home and car claims: TDI says the insurer has 15 business days to acknowledge your claim and start its review. It then has 15 business days after receiving what it needs to tell you whether it will pay. A rejection must explain why in writing. The insurer can extend the decision by 45 days if it tells you why. After agreeing to pay, it must pay within five business days. TDI home and car claim steps. Ask your state insurance department which deadlines apply to your commercial claim.

Ask for the reasons and respond in writing

Ask for the decision in writing, with the policy language the insurer relies on. In its guidance for home and auto policyholders, TDI suggests telling the company why you disagree and sending supporting documentation, such as a contractor's estimate, because the company "may have overlooked something." TDI home and auto dispute guidance. You can take the same approach with a business claim.

If the insurer sends a letter reserving its rights under specific policy provisions, read the provisions it cites. You may want to consider having a coverage attorney review the letter, especially for a lawsuit or a large loss.

Use the appraisal or arbitration clause for disputes about the amount

Your policy may include a clause for settling disagreements about the size of a loss, and policies name it differently. The CDI's commercial insurance glossary calls it an arbitration clause, which "allows the insured and the insurer to each appoint an arbitrator if they cannot agree upon an appropriate claim settlement." The two arbitrators then appoint an independent umpire, who decides if they disagree, and "the final decision is binding." CDI commercial insurance glossary.

Check your commercial policy's appraisal or arbitration clause for its exact terms, costs and any deadline to demand it. For comparison, TDI's guidance for auto claims says an appraisal decision "is binding on the amount of the damage," and that coverage disputes are settled separately. It also says you pay for your own appraiser and half of the umpire's costs. TDI home and auto dispute guidance.

Consider a public adjuster

The CDI's commercial insurance glossary defines a public adjuster as "a licensed person or organization that represents the policyholder by contract in property damage claims negotiations with an insurance company." CDI commercial insurance glossary. NAIC consumer guidance written for homeowners notes that if you hire one, "you would be responsible for any related fees." NAIC homeowner claims guidance.

State rules on licensing and fees differ. In its guidance for homeowners claims, TDI says Texas public adjusters are licensed by TDI and can charge up to 10% of the total amount the insurer pays for the claim. TDI also says you have 72 hours after signing a public adjuster contract to cancel it. TDI on public adjusters. Confirm any public adjuster's license with your own state insurance department before signing.

File a complaint with your state insurance department

If you believe the insurer is not following the law or your policy, you can complain to your state insurance department. The NAIC explains that the department will forward your complaint to the insurer, and "the insurer must respond with its explanation." The department then decides whether the insurer was fair based on your policy. If it finds the insurer acted improperly, "it can require the company to correct the problem and comply with state laws and rules." NAIC on filing a complaint.

Before you file, gather your policy number, claim documents, bills and a record of every communication with the insurer. Then use your state's complaint page. Some examples:

• Any state: NAIC directory of insurance departments.
• California: CDI consumer help and complaints.
• Texas: TDI insurance complaint help.
• New York: DFS complaint page.

Set expectations. In its general complaint guidance, TDI says it "can't make a company pay more than your policy allows," but it can ask the company to justify what it is paying. TDI complaint process.

Mediation, appeal or a lawsuit

TDI notes that you can ask for alternative dispute resolution, which uses mediation with a neutral third party, and that you may have the option to sue the insurance company in court. TDI legal help. If you are considering a lawsuit, speak with an attorney early about the deadlines that apply.

Flood claims under the NFIP have a separate route. FEMA says that if your claim is denied, you can appeal to FEMA "within 60 days after you receive a letter from your insurance provider." FEMA NFIP claims checklist.

Claims history feeds into pricing. The CDI says "claims loss experience is reflected in the rating formula and directly affects premium costs." CDI commercial insurance guide. Our guide to how business insurance premiums are calculated explains the rest of the formula.

For workers' compensation in states that use NCCI's experience rating plan, the mod generally uses three years of payroll and loss data. The formula weights frequent small losses more heavily than a single large loss of the same total: in NCCI's example, ten $5,000 losses produce a much higher mod than one $50,000 loss. Most states have approved an adjustment that counts only 30% of a medical-only claim. NCCI says this "decreases the incentive for employers to pay medical-only claims without reporting them." NCCI ABCs of Experience Rating.

Do not delay a required notice to protect your premium; as the CDI notes above, your contract requires timely reporting. If your mod has changed after a claim, see why an experience modification rate increases.

One organized file makes every step easier:

• Policy, declarations page and endorsements.
• Claim number, adjuster name and contact details.
• A log of every call, email and meeting.
• Photos, videos, inventories and incident reports.
• Receipts for temporary repairs and extra expenses.
• Copies of everything you send, with the date sent.
• Deadlines, settlement offers and your responses.

Before the next incident, decide who reports what. A business insurance incident-reporting contact tree sets that up in advance. Our guide to reading a business insurance policy helps you find the conditions section that lists your duties after a loss.