No business owner wants to hear the news that something bad has happened to their business — but having the right commercial insurance policy can mitigate the financial damage. Commercial insurance, also called business insurance, covers businesses in the event of property damage, customer injury, and other unforeseen scenarios.
Here’s what you need to know about filing a commercial insurance claim and how to use a claims management system to streamline the claims process.
What Is Commercial Insurance?
Commercial insurance, or business insurance, is a type of insurance policy that’s aimed at businesses rather than individual policyholders. As is the case with personal home or car insurance, a commercial insurance policy covers some things and not others.
For example, general liability insurance will only cover damage to third parties, while a commercial property insurance policy will cover damage to your own premises.
The most comprehensive type of commercial insurance policy is a business owner’s policy, which combines multiple types of coverage into a single package. For a sole proprietor or a small business owner, this might be enough.
But if you have a fleet of vehicles, operate in a disaster-prone area, or run a risky type of business, you may need additional insurance coverage, such as commercial auto insurance or errors and omissions (E&O) insurance.
All insurance policies have exclusions and deductibles, so read the fine print before choosing an insurance policy or submitting a commercial insurance claim.
Types of Commercial Insurance
Commercial insurance terminology can be confusing, which is why it’s important to keep track of business claims in a claims management system. Maintaining proper insurance coverage isn’t just good for your business — it’s a legal requirement in some states. At the very least, you’ll need workers’ compensation insurance, disability insurance, and unemployment insurance to comply with federal law.
Here are a few of the most common types of commercial insurance policies:
- General liability insurance: General liability insurance covers bodily injury and property damage to a third party, such as a customer or client.
- Business property insurance: Business property insurance covers damage to your own property or premises due to vandalism, fire, and other causes. Some scenarios, such as floods and earthquakes, may be excluded.
- Commercial auto insurance: If your business owns or operates vehicles, you’ll need an auto insurance policy in order to submit auto claims.
- Professional liability insurance: Also called errors and omissions insurance, this type of coverage protects you if you make a mistake in the course of doing business, such as providing inaccurate financial or legal advice.
- Workers’ compensation insurance: Workers’ compensation insurance covers lost wages and medical costs for employees who are injured on the job.
- Home-based business insurance: This is a type of small business insurance coverage for individuals who work out of their homes. Your insurance company may allow you to add it to your existing homeowners insurance policy.
6 Examples of Commercial Insurance Claims
Now that you know what types of commercial insurance are available, what does filing a commercial insurance claim actually look like? Here are just a few of the most common scenarios that may be eligible for a business insurance claim.
Customer injury claims include anything from a slip and fall incident on your property to a product liability claim due to a faulty or defective product. You can submit this type of claim to cover medical costs related to the injury, as well as court costs or settlement fees if the customer files a lawsuit.
Commercial property insurance covers your building, signage, equipment, and other business assets from wind, fire, and other physical damages. To submit a property damage claim, you’ll need to provide evidence to substantiate the losses.
If you cause damage to a customer’s property while performing a service, you can submit a property claim under your general liability insurance policy.
Fraud and Theft
Fraud, theft, and vandalism may fall into different categories depending on the type of loss or damage incurred. For damages due to theft or burglary, you’ll typically need to file a property insurance claim to recoup any financial losses.
Businesses that deal with large amounts of cash or expensive merchandise may need specialized crime insurance to cover cases of fraud and embezzlement.
Lawsuits for defamation or reputational damage can result in some of the most costly commercial insurance claims. These can arise inadvertently through advertising that defames a competitor or a slanderous statement made by an employee.
A freelancer or small business owner could even be sued for invasion of privacy for posting photos of a project on social media without a client’s permission. The right coverage will pay for your associated legal fees and court costs.
As data breaches become more common, your business could be at risk of a lawsuit if your systems are hacked or if you mishandle confidential customer information. Data breach coverage and cyber liability insurance may cover legal fees, fines, and even extortion money paid to ransomware attackers.
Depending on your policy, you may also be able to file a claim for lost business income or to cover the cost of credit monitoring for affected customers.
Has your business been shut down by a civil authority due to an evacuation order, road closure, or curfew? You may be able to file a business interruption claim to cover your expenses, including payroll, taxes, and rent or mortgage costs.
How to File a Commercial Insurance Claim
Maintaining the right commercial insurance policy is just the start. In order to make use of your policy, you’ll need to know how to file a claim. Claims without enough evidence to back them up can be denied by your insurance company.
Here’s how to file a claim and avoid common claims processing pitfalls.
1. Gather Evidence
First, be proactive and gather sufficient evidence to support your claim. In the case of a workplace injury, file an incident report and provide appropriate medical attention. In the case of property damage, take photos of the incident, maintain receipts for damaged merchandise, and take steps to prevent further damage.
Commercial insurance claims need to be filed in a timely manner, so don’t wait until the last minute. By using a cloud-based incident management system like Pulpstream, you can make a habit of good record-keeping and be prepared for worst-case scenarios.
2. File Your Insurance Claim
Next, file a commercial insurance claim with your insurance company. The process will vary depending on what type of claim you’re submitting.
For example, to file a workers’ compensation claim, you’ll need to work with the injured employee to fill out the appropriate forms and submit them on their behalf. They’ll need to provide their phone number, details of the injury, and other personal information.
Depending on the incident, you may also need to file a report with law enforcement or regulatory bodies alongside your insurance claim.
3. Communicate With Your Insurance Company
Your insurance company will investigate the incident, and your claims adjuster will get back to you with the outcome of your claim. You can accept or appeal the decision or file a complaint with an insurance regulator if you disagree with the outcome.
It’s important to stay on top of communications with your insurance company to avoid delays and other pitfalls. Pulpstream makes it easy to communicate with your claims adjuster, regulatory bodies, and other affected parties all in one place, resulting in a more efficient and accurate claims process.
Keep Track of Insurance Claims With Pulpstream
Commercial insurance is there to protect you in cases of loss or damage due to a fire, theft, or burglary, or even your own negligence. You can file a business insurance claim for everything from a customer injury to a data breach — as long as you have the right insurance policy and the evidence to back it up.
The more claims you have in motion, the more chances there are of making a mistake during the claims management process. You can even be denied business insurance during the underwriting process if you have a history of making too many claims.
By tracking your claims in a cloud-based platform like Pulpstream, you’ll be able to stay on top of claims administration. You can use Pulpstream’s built-in reporting tools to run detailed reports and sort claims by month, type, and other relevant factors.
Request a demo today to see how it works!