This article discusses typical duties required of insureds by commercial property policies and the steps to ensure claims are handled efficiently, and damages are fully reimbursed up to the policy limits.
An Insureds Common Duties
Each commercial property policy will tailor the duties of the insureds to the specific circumstances of their coverage. However, here are every day responsibilities most policies require in the event of a loss:
- Notify the police if laws may have been broken.
- Notify the insurer as soon as possible, detailing how, when, and where the loss or damage occurred. Include a description of the property involved.
- Take all reasonable steps to protect the property from further damage. Keep a record of the expenses required to do this, including hours and wages.
- Provide the insurer with an inventory of the damaged and undamaged property if requested, including quantities, costs, values, and the amount of loss claimed.
- Set aside the damaged property, keeping it in the best possible condition for examination. Allow the insurer to inspect the property and any related records.
- Allow the insurer to take damaged or undamaged property samples for inspection, testing, or analysis. Cooperate fully with any claim investigations, which may include being questioned under oath.
Minimizing Loss
After the loss event has occurred and everyone is safe, and a claim has been reported to the insurer, the organization should focus on minimizing the loss and protecting the property from future exposures. To aid in this process, the adjuster or other claims professionals should be contacted for suggestions. They can often make recommendations based on first-hand knowledge of similar situations.
Protecting undamaged property and minimizing loss frequently involves the following:
- Checking, drying out, repairing, and reactivating safety and protection systems. Boarding up or using tarps to cover openings in the roof, walls, or windows. Setting up emergency heat, dehumidification, or water extraction equipment.
- Removing damaged components that hamper loss recovery—for example, removing debris to get a better view of structural damage.
- Inspecting, drying out, and, if necessary, repairing all equipment, motors, and machines before starting them again. Contacting suppliers to cancel any scheduled deliveries, mainly if the loss makes on-site storage impossible.
- Arranging for specialists to inspect and service electronic equipment, such as computers, telephone systems, or medical devices.
- Having specialists salvage paper documents and electronic media, and data. Removing soot, smoke, and water from furnishings and other contents.
Other Steps
Dealing with the policy requirements for filing a property claim is only one element of responding to a loss. Other suggested actions include the following:
- Stay safe. The property may still be hazardous after staff and first responders have left the scene because adjusters and other insurance professionals will need to access the property and take reasonable steps to make it as safe as possible. This might include roping off unsafe areas and removing broken window glass and other debris.
- Document with photos and videos. Photos and videos will help the claims adjuster better understand the scope of the damage. Images can also refresh one’s memory throughout the claims process. Make sure to take wide-angle and close-up shots, and add verbal or written notes when necessary. If security camera footage exists, keep it in a safe spot and back it up, if possible.
- Stay organized. It can be challenging to track all the costs assigned to the claim. Appointing one person to oversee the entire claim process will help keep things organized. The accounting department should create special work orders, job numbers, and other accounting procedures to separate loss-related expenses from normal operating expenses. Keep all documentation related to the claim in a single file, which can be as simple as a binder or a spreadsheet.
- Stay calm. The urgency to reopen quickly may cause insureds to rush the claims process, which can be lengthy. While this urgency is understandable, rushing can lead to mistakes that cause more significant financial losses down the road.
This article discusses typical duties required of insureds by commercial property policies and the steps to ensure claims are handled efficiently, and damages are fully reimbursed up to the policy limits.
An Insureds Common Duties
Each commercial property policy will tailor the duties of the insureds to the specific circumstances of their coverage. However, here are every day responsibilities most policies require in the event of a loss:
- Notify the police if laws may have been broken.
- Notify the insurer as soon as possible, detailing how, when, and where the loss or damage occurred. Include a description of the property involved.
- Take all reasonable steps to protect the property from further damage. Keep a record of the expenses required to do this, including hours and wages.
- Provide the insurer with an inventory of the damaged and undamaged property if requested, including quantities, costs, values, and the amount of loss claimed.
- Set aside the damaged property, keeping it in the best possible condition for examination. Allow the insurer to inspect the property and any related records.
- Allow the insurer to take damaged or undamaged property samples for inspection, testing, or analysis. Cooperate fully with any claim investigations, which may include being questioned under oath.
Minimizing Loss
After the loss event has occurred and everyone is safe, and a claim has been reported to the insurer, the organization should focus on minimizing the loss and protecting the property from future exposures. To aid in this process, the adjuster or other claims professionals should be contacted for suggestions. They can often make recommendations based on first-hand knowledge of similar situations.
Protecting undamaged property and minimizing loss frequently involves the following:
- Checking, drying out, repairing, and reactivating safety and protection systems. Boarding up or using tarps to cover openings in the roof, walls, or windows. Setting up emergency heat, dehumidification, or water extraction equipment.
- Removing damaged components that hamper loss recovery—for example, removing debris to get a better view of structural damage.
- Inspecting, drying out, and, if necessary, repairing all equipment, motors, and machines before starting them again. Contacting suppliers to cancel any scheduled deliveries, mainly if the loss makes on-site storage impossible.
- Arranging for specialists to inspect and service electronic equipment, such as computers, telephone systems, or medical devices.
- Having specialists salvage paper documents and electronic media, and data. Removing soot, smoke, and water from furnishings and other contents.
Other Steps
Dealing with the policy requirements for filing a property claim is only one element of responding to a loss. Other suggested actions include the following:
- Stay safe. The property may still be hazardous after staff and first responders have left the scene because adjusters and other insurance professionals will need to access the property and take reasonable steps to make it as safe as possible. This might include roping off unsafe areas and removing broken window glass and other debris.
- Document with photos and videos. Photos and videos will help the claims adjuster better understand the scope of the damage. Images can also refresh one’s memory throughout the claims process. Make sure to take wide-angle and close-up shots, and add verbal or written notes when necessary. If security camera footage exists, keep it in a safe spot and back it up, if possible.
- Stay organized. It can be challenging to track all the costs assigned to the claim. Appointing one person to oversee the entire claim process will help keep things organized. The accounting department should create special work orders, job numbers, and other accounting procedures to separate loss-related expenses from normal operating expenses. Keep all documentation related to the claim in a single file, which can be as simple as a binder or a spreadsheet.
- Stay calm. The urgency to reopen quickly may cause insureds to rush the claims process, which can be lengthy. While this urgency is understandable, rushing can lead to mistakes that cause more significant financial losses down the road.
The Last Word
The suggestions made here are necessarily broad and general. For more detailed recommendations tailored to your specific operations, contact an InsureGood Advisor today.
