How to claim on your business insurance

What is a business insurance claim?

Business insurance is there to provide a safety net should something befall your business that leaves you and it in financial trouble. At this time, you would need to lodge a claim. This could be to pay for damages to other people property or reputation, death or injury to an employee, client or passerby. 

To avoid disappointment or delay, you’ll need to have a good understanding of what business insurance policies cover you for various types of claims. For example, say someone walks into a glass door, smashing it and injuring themselves in the process. 

In this case, you would probably need to claim for damage to property, and potentially loss of earnings if you needed to close the shop until the damage had been rectified. You’d probably also face a demand for costs associated with the injuries sustained, meaning you’d be claiming on different policies. 

What can you claim for? 

There’s a wide range of business insurance policies available to choose from, and while it would be great to have them all, cover is not cheap. As such, it’s essential to pick the policy or policies that offer the greatest level of protection for your type of business.

For example, depending on the type of business you have you might want to consider some or all of the following types of cover:

• Public liability

• Employers' liability

• Professional indemnity

• Legal expenses

• Commercial property damage

• Business interruption

• Goods in transit

Of these, the top three are probably the most widely bought as they deal with the key elements of business, staff, customers and the general public. These policies embrace personal injury, loss of earnings, damage to your and other people’s property. 

Here’s what you need to know about each of them:

Public liability insurance

This covers costs incurred if someone holds you responsible for loss or damage to their property or personal injury. The incident that prompted the claim doesn’t need to have occurred at your business premises, it could be anywhere you’re working where you or your staff come into contact with the public, a client or customer. 

• For example, you’re contracted to clean a nightclub every morning. On one occasion, a member of bar staff slips on the recently-washed dance floor, breaking their wrist. You need to claim for any compensation you would be out of pocket for, including their injuries and loss of earnings.

Employers’ liability insurance

This covers costs arising from a claim lodged by a member of your staff for loss of their property or injury sustained while at work, whether this is at your premises or not. 

• For example, you run a fast-food company and a member of kitchen staff gets repetitive strain injury flipping burgers.

Note: Unlike other types of business insurance, any company that employs staff must have an employers’ liability policy, and display proof of cover. Firms that don’t comply face a fine of £2,500 a day. The exception is if you run a family business and only employ immediate family members.

Professional indemnity insurance

This protects you from claims brought by clients for financial or reputational damage caused by your work. It’s often considered a must where you work with client’s data, provide advice or publish works about other people or businesses. 

• For example, you make a mistake on architectural plans for an extension, which costs the client more money that expected or delays the job’s completion.

How to make a claim?

Insurance will never top anyone’s Christmas list, but like an umbrella when it rains, it comes in handy if things go wrong. At this point it’s essential to get act quickly. The good news is lodging a claim is invariably straightforward and the process be spelled out in your policy. 

Notify your provider 

If you can’t lay your hands on the relevant document, just contact your provider, or visit their website for an A to Z on what to do next. If you have insurance through our partner service Superscript all you need do is log in via your online account, send a message or call in your claim. In any case, here’s what you can expect to do:

Provide case issues

While speed is of the essence when putting in a business insurance claim, it’s equally important to be as accurate and helpful as possible. Check whether there is any guidance in policy documents about what information is needed and in what format. 

You may, for example, be asked or able to submit photos to support your claim. Receipts are important is the claim is for damage to property, such as stolen tools. Business accounts data will be required if you’re lodging a claim for loss of earnings.  

You can expect to show that you had recommended or required health and safety signage in place. If your claim relates to injuries or loss suffered by a staff member at work, you’ll need to demonstrate you displayed proof of your employers’ liability insurance.

If you’re unsure about what is and isn’t relevant to a claim give your insurer a call to talk the matter through. This small extra step is better than submitting a claim that lacks important information. 

Wait for a decision 

One of the main reasons why you’ll need to get your claim in as soon as possible is because it could take some time for your policy provider to reach a decision on your claim. The exact timeframe will depend on the complexity of your claim. 

A relatively straightforward claim for vandalism to a work van would be expected to take much less time to resolve than certain others. For example, a claim for theft from your store room shouldn’t take more than a few days to clear up. But a claim against negligent financial advice or ones involving personal injury can take months to wrap up if legal, medical or other professional advice is sought. 

It is worth keeping a dialogue going with your insurer and responding quickly to any requests for further information. Once your claim has been settled, you can expect a payout within five working days.

Why can insurers refuse to pay out? 

The UK insurance sector pays out more than £22 million on business insurance claims each day, of which £7.6 million are liability claims. 

But that doesn’t mean all claims will be successful. In fact, the Financial Ombudsman Service reports that only 10% of complaints it receives about rejected business insurance claims are upheld. 

Here are some of the main reasons why a claim could be rejected:

• Not covered: the claim centres on a form of protection that’s not covered or excluded under the policy. For instance, you buy professional employers’ liability insurance, but the person injured at your workplace is a passerby, not a member of staff.

• Underinsured: the scale of the claim exceeds the limit of cover provided under the policy. For example, you have £500,000 worth of professional liability insurance, but are sued for £1 million.

• Evidence: you aren’t able to satisfy the insurer that your version of what led to the claim is true. For example, you claim for £5,000 worth of tools stolen from your warehouse, but can’t provide any receipts or other proof of ownership.

• Due procedure: you haven’t followed the claims process. For example, you explain what happened, but without certain important details, such as the date, time and location of the event that led to the claim. A failure to provide details of any witnesses could also hamper a claim.

• Fraud: you claim for loss or injuries that were not sustained. For instance, you claim for loss of stock from your lock-up, which subsequently are proven to still be in your possession.  

Note: If you think your claim has been unfairly refused, you can complain to your insurer. After eight weeks, if you are still not happy with its resolution, you can contact the Financial Ombudsman Service (FOS).