If you're like a lot of entrepreneurs, you probably don't think much about filing an insurance claim-except to hope that you never have to. But what if something happens, and you find yourself bombarded by forms and requests for information? Taking the time to prepare in advance for such a situation will not only make the process easier on you, but also settle your claim faster.
"It takes a whole lot longer to resolve a claim when the business owner isn't able to produce the documents needed in a somewhat timely manner," says Melody Mosley, an attorney and partner with Berger, Kahn, Shafton, Moss, Figler, Simon & Gladstone in Irvine, California.
First, you need to understand what insurance companies look for and why. For starters, Mosley advises maintaining purchase documentation on all pieces of equipment and inventory items so you will be able to show what the item was, when it was purchased and how much you paid. If you have a loss of inventory items, you'll need to produce sales records as well. "It's not enough to just show you bought the item," Mosley explains. "You also need to prove you didn't sell the item."
If the loss is catastrophic, and you're filing a claim for business interruption, you'll have to produce records to substantiate that claim. The insurance company may even want to take a look at your general ledger and general journal. "You've got to prove that you have the expenses, and be able to show which ones are continuing and which ones are saved because of the loss," Mosley says. "The insurance company is not going to be satisfied with a mere profit-and-loss statement. They want the original documents that created the statement."
Don't be surprised if your insurance carrier requests some information about your alarm system or wants the monitoring company's records of the incident in question. Because the latter might require a release form, complete itpromptly and follow up to make sure it's handled within a reasonable amount of time.
Keep your documents organized and store them in a safe place. In addition to providing the actual documentation, Mosley suggests making your accountant available to the insurance company to assist in determining a business-interruption loss. And if the insurance company wants access to certain employees as part of the investigation, give it to them. Cooperation and quick responses will get your claim processed and your payment made-and allow you to get on with running your business.
Berger, Kahn, Shafton, Moss, Figler, Simon & Gladstone, firstname.lastname@example.org.