Sep 26, 2011

Business insurance claims - the three things you need

Everyone who buys a business insurance policy hopes that they will never have to use it. But, if that situation does arise, they want three things.

Firstly, they want to know that they have the right policy cover in place. Secondly, they want to make sure that they get good support during the claims process and thirdly, that the insurance company behind them have a good reputation for paying claims.



Let’s look at these one at a time:

The first point is something that many businesses find out only after they have suffered a claim. For example, if you lease a building in England and Wales you are normally responsible for the replacement costs for all fixed glass and sanitary ware. So, if your shop window gets smashed, then you and not the landlord, have to replace it. Now, there are many policies out there which provide this cover automatically. But, when you read the small print you find out that the sum insured is only £1,000. Now, how many windows does it take to cost £1,000? Usually this is only one or two, when you add in any emergency, out of hours site visits by a glazier.

So, you want to make sure that you have the right cover and this is not always the case, particularly when you buy your policy from an online business insurance comparison website that does not really point out that you may have inadequate cover. If you speak to an independent business insurance broker, they will talk through the quote and would explain the need for not only the right cover, but adequate sums insured.

The second point is again something that you only become aware of during the claim process. Customers normally ask us, how long will a claim take to be settled? This of course depends on a number of factors, but once the relevant commercial insurance company have the completed claim form, if required, and supporting documents it should not take more than 7 - 10 days to get the settlement cheque. But, and this is a big but. There are some insurers that insist on receiving an original completed claim form and two estimates for repair or replacement works. You have no option whatsoever to do the work and then submit a claim later on. Whilst this latter option is not the correct route to go down, there are circumstances when you need to do some works urgently. Think of last winter, we had many, many burst pipe claims. With most of the insurers we deal with, if the works were under £5,000 we could simply authorise this over the phone. We agreed with the client that the claim would still be scrutinised but they could proceed with the works. There were some insurers though that still insisted on the claim form and two estimates. Getting two contractors to quote, in early December, when everywhere was under two feet of snow was not just difficult, but impossible.

This is where you find out exactly what support you get. If you deal direct with an insurer or buy a policy without any form of broker interaction, how do you know you are going to have someone fighting your cause and insisting that insurers settle the claim?

Lastly, there are good, bad and indifferent business insurance claims departments. It is too easy to say that all insurers try to wriggle out of claims. This is simply not true. All insurers want to have the full facts before them in order to consider a claim. The problem is that there are some insurers, usually the cheapest of the cheap, that take ages and ages to settle any claim. Again, this where dealing through an independent business insurance broker is the right way forwards.

Whilst we cannot publicly say who is good and bad, we know full well which insurers are better and quicker at settling claims with less fuss. If we recommend one that has a bad reputation or history, then we get it in the neck when claims occur. It is therefore in our interest to ensure that any quotes we give are from reputable insurers.

There is of course a common theme throughout this, if you want good service and quick claims settlement, and then make sure you use an established, independent business insurance broker.

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