Whether your business is damaged by a hurricane, tropical storm, vandals or other peril, your insurance coverage typically provides the financial funds to rebuild or repair your facility and cover other losses. The amount paid on a claim and the timeliness of such payment can have a dramatic impact on the financial well-being of your business. While we are about halfway through hurricane season, there are many that say we are overdue for a hurricane to make landfall in Florida. As an experienced commercial insurance claims attorney and former adjuster, I have provided an overview in this two-part blog post of steps you will want to take after suffering loss from a covered peril.
Identify and Obtain all Relevant Policies
If you are a business owner with proper insurance coverage, your damages and lost business income will typically be covered by one of your insurance policies. First-party property policies will cover property damage except for flood damage. Flood damage must be covered by the federal flood program. Specialized policies can cover a range of other losses, including inland marine, event cancellation or multi-peril policies. In the wake of an event causing a loss, the first step is to contact your insurance brokers to obtain copies of all policies, so you can ascertain the full extent of potential coverage.
Provide Notice of Claim
The next important step that must be undertaken is to provide immediate notice to all potential insurance carriers to avoid forfeiting your claim. While you should provide notice as soon as possible, you need to carefully review all policies to determine the deadlines for providing notice and any specific requirements for how notice is provided. If the policy requires written notice, oral notice to your insurance carrier generally will be ineffective. Similarly, notice to an insurance carrier via email or U.S. mail to the wrong address might prove to be insufficient and jeopardize your claim. Many insurance companies have different departments that handle different types of claims. Further, the notice procedure may differ based on whether an insured is reporting a potential liability claim or property loss claim. It is essential that you comply precisely with the notice requirements in your policy.
Submit Sworn Proof of Loss
Once an insurance carrier has been notified of a claim, most policies will require that a sworn proof of loss be submitted. The proof of loss will need to contain a sworn statement regarding the amount of the loss. The window within which the proof of loss must be provided is usually fairly narrow; the deadline can be as short as sixty days. Many policyholders find that they need more time, so it is important to obtain an extension in writing from the insurance company. Compliance with deadlines when making an insurance claim is very important. If you fail to provide a timely proof of loss, you might forfeit your right to coverage of the claim.
Be Aware of How Deductibles and Policy Limits Are Handled
Many policies contain sublimits that provide less than full replacement costs for property damage. Policies also vary in terms of the period of time before business interruption coverage begins and the maximum period of coverage during which business income is covered. Even once your business is open for business, your policy might still provide coverage for the period that your company takes to get back up to speed. Many insurance disputes arise over disagreements between the policyholder and insurer regarding when the business had fully recovered.
Although a severe storm or other peril can cause significant harm to a business, some businesses that operate prudently in the aftermath of a crippling storm and that fully utilize their insurance benefits can actually emerge stronger after such a catastrophe. If you have questions about a commercial insurance claim arising from damage to your business, we offer a free consultation, so we can answer your questions. My law firm represents policyholders in claims disputes in Miami and throughout Florida. The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations. No Recovery, No Lawyer Fees. Call 305-461-1095 or Toll Free 1-866-71-CLAIM.