Steps to file an insurance claim for injuries to your small business from Coronavirus

Coronavirus Resources
Steps to file an insurance claim for injuries to your small business from Coronavirus

The unexpected harm that the coronavirus outbreak is causing to small businesses everywhere will drive additional insurance claims seeking coverage for such injury. This article addresses the steps to file an insurance claim to (a) optimize the possibility of getting the coverage that your small business insurance policy might provide, and to (b) get the maximum amount possible.

Coronavirus Impact on Businesses

Nearly all businesses have been impacted by the coronavirus outbreak. Some can no longer operate at all for a variety of reasons. It might be that they can only secure a limited amount of necessary operational supplies. Others no longer have access to employees necessary to proceed. Others create products for which there is no longer a market. Others cannot open because of the physical presence of coronavirus at their business. Then there are businesses which must stay closed because they require direct customer interaction that is no longer possible given social distancing orders. As is the case anytime a business suffers from an unexpected loss, many businesses will look to their insurers for coverage. Dealing with insurance companies can be a frustrating process with numerous pitfalls that can limit the amount of money that might be available for an insured.

Steps to File a Claim with your Insurance Company

The following steps can help make sure that you seek coverage in a way to maximize the possibility of getting fully compensated for your business’ loss to the extent your policy allows.

Step 1:  Acquire and review your policies

The first and most important step is to get a copy of all your insurance policies. There are many different types of insurance that your business might have. A significant distinction between policies is whether it’s a specified peril policy that insures for a specific type of instance, or an all risk policy. Examples of a specific peril policy include event cancellation insurance, contamination insurance, communicable disease coverage, and workers compensation coverage. Even aside from the broad distinction between a specified peril and an all risk policy, it is important to read the language of your policies because each policy can have different material language that can change the scope of coverage.

To get a copy of your policies, you can contact your insurer directly. Some insurers will allow you to access your policies directly from their websites. Other insurers require you to contact customer support at which point they might email you a copy of your policies or send the copies by physical mail. If you purchased your insurance through an agent or broker, you could contact that person because they will likely have access to your policies.

To understand particular types of coverage and exclusions that are relevant to coronavirus claims in particular, you can read further about Business Interruption Coverage here, Civil Authority Coverage here, and exclusions for Communicable Diseases and Virus and Bacteria here.

Step 2:  Gather evidence of loss

The type of evidence you will need to gather depends on the type of coverage you have and what type of claim you are making. For example, if you are seeking coverage under a business interruption policy, then often you will need to gather evidence of what the business would have earned absent the interruption. This figure should include continuing normal operating expenses that you would have incurred such as payroll. Such evidence can consist of past profit and loss statements or other documents illustrating a history of business income and profits from the sale of specific goods or services that are no longer able to be sold due to the disaster. If you are claiming any type of injury to property, then any evaluations of value, receipts for purchase of the property, sales agreements, and numerous before and after pictures can be helpful. It is better to be over inclusive than under inclusive. As such, gather as much evidence as you think might even potentially be useful in supporting both your loss and the type of coverage your policies include.

Step 3:  Contact your insurer

Often policies have contact information or specific ways that an insured can contact the insurer.  You should reach out to the insurer to notify it of your loss and request information regarding what it requires for making a claim. Sometimes it will ask you to fill out a particular “Proof of Loss” form that the insurance company uses. You can read the policies for an understanding of what steps you are required to take. After doing so, it is a useful safety precaution to get the information directly from the insurer to avoid any delays or denials that can result from not following the proper procedure required by your specific policy.

Step 4:  Cooperate with the insurer’s investigation

Once you submit your claim, your insurer will begin its investigation. It is important that you cooperate with all reasonable requests made by the insurer. This process can potentially include participating in a recorded interview under oath. It can also potentially include providing additional documentation that the insurer might request. Complying quickly with the insurer’s reasonable requests will cut down on delays and potentially lead to a payment under your policies faster. Even if you don’t feel motivated because of stress or if you don’t understand why the insurer makes the requests that it does, it is important that you still cooperate with all reasonable requests. If you don’t, you potentially risk having coverage denied which would otherwise have been provided.

Step 5:  Keep notes of all interactions with your insurer

Dealing with insurance companies can be frustrating. Information that they provide can differ from one representative to another and their representatives do not always document their work or do so accurately. For this reason, it is important that you document any interaction that you have with the insurance company including whether it be a phone interaction, email, letter or any other type of communication. If on a phone call, document the time, date, duration of call, number called, your number, the name of the representative, and details of what was discussed.  Such documentation is helpful if you need to reference the communication in future discussions with the insurer or if you ultimately need to fight the insurer for improper delays or denials.

While the type of coverage you have depends on the specific insurance policies you purchased, following these steps can provide the best possible chance of getting full payments under that coverage.

If you would like a review of your business insurance policies prior to contacting your insurance company, the Law Offices of Scott Glovsky is happy to conduct a complimentary review of these policies to advise you about your coverage. Please call us at (626) 604-6973.