Many of the recent mass protests across the country have been peaceful. But, some protests have led to significant property damage due to arson or vandalism, as well as business interruption losses for businesses forced to close (in some cases shortly after reopening as shelter-in-place orders related to the pandemic were lifted).
Now, affected business owners are all asking the same question:
What should I do now? This article highlights why business owners should consider:
(1) promptly notifying each potentially applicable insurance carrier about any claims
(2) immediately gathering and documenting information about the nature and amount of the losses.
A typical insurance policy will require that the insured provide notice of a claim to the insurance carrier as soon as reasonably possible or as soon as practicable, but some have stricter provisions. Each insurance policy’s notice provision must be reviewed carefully, as failure to comply with this provision may be grounds to deny the claim. It is best to review the policies and act promptly in order to avoid any disputes about failure to comply with notice provisions.
In the event the insured lacks a complete copy of a potentially applicable policy, we recommend contacting their broker, agent or insurer as soon as possible.
After reviewing the notice provision, promptly submit the claim for coverage to all relevant insurance carriers. Typically, claims may be submitted in different ways, including:
- Submitting the claim to the insurance carrier through the insurance agent or broker;
- Depending on the insurance carrier, submitting the claim online or through apps (iOS and Android);
- Contacting the main claims telephone number published on the insurance carrier’s website or in the policy; or
- If there is an existing relationship with a claims handler, through that handler, although insureds should be careful to ensure that notice is given as specified in any event.
Additional Crucial Steps
After or simultaneous with promptly notifying their insurance carriers, business owners should review and document the nature and extent of their losses. Eventually, their insurance carriers will ask that they submit a Sworn Proof of Loss statement and any information supporting the claim.
Below is a checklist that should aid business owners throughout that process:
- Gather all potentially relevant policies depending on the type of claim, including but not limited to: commercial property, auto liability, homeowners or renters, general liability, excess/umbrella policies, workers compensation, and directors and officers coverage.
- In addition to reviewing the notice provision specifically, review all coverage provisions related to property damage, theft/vandalism, bodily injury, and loss of business income;
- Collect documents showing purchase price or other value of equipment or merchandise that may be impacted;
- Review what was stolen, damaged or destroyed during the events and document your findings;
- Document all potential loss of business income in light of any forced closure or interruption in business due to direct physical damage or through civil authority/government order;
- Gather financial documents from the previous few years to show anticipated business income during the same time period had the loss not occurred;
- Take photographs or video of any property damage to the location, including, equipment, goods, or merchandise;
- Interview any employee who was present during a protest to learn what they may have seen and document that interview, and if the employee was injured at your location during a protest, follow all laws on reporting work-related injuries; and
- File a police report, if required, regarding any property damage, stolen equipment/merchandise/goods, and any bodily injury that occurred on site.
Business owners need not complete this checklist before submitting a claim for coverage. They may instead provide the insurance carrier with additional information as the claim process continues. Err on the side of providing notice sooner rather than later.
The checklist provides some background on what should be done and information to be gathered, but there may be additional requirements within the policies themselves, or the carriers may request certain additional information once the claim is submitted.
No substitute exists for being prepared and diligent. Business owners must act promptly during these tumultuous times to ensure that their path to insurance recovery is as smooth as possible.
Written by Kim Winter. Here’s what you’ve missed?