Dealing with property damage after a natural disaster, weather event, or vandalism can take a toll on business owners. While filing an insurance claim can help bring some peace to the situation, the process should be handled with great care. Commercial property owners should learn more about how to handle the commercial property damage claims process and understand their options in the event they feel their insurer is taking advantage of them.
Handling Commercial Property Damage Claims
When a business suffers property damage, all operations can come to a screeching halt. Having a commercial property damage insurance policy can help to mitigate the costs associated with repairing or rebuilding after the damage has taken place. This specific coverage is designed to facilitate a resolution for damage to the physical property itself, as well as to items located within the building, including equipment, furniture, product inventory, supplies, and fixtures, among other items. Commercial property damage coverage can also cover the costs associated with the repair or replacement of stolen, damaged, or destroyed property.
A commercial property insurance policy legally binds an insurance provider to process its insured’s claim and to pay what is owed for the covered damages promptly. However, commercial property claims can be wrongly delayed or even denied by insurance carriers. Because of this, as well as the many complications that come with filing an insurance claim, these steps can help policyholders best handle their property damage claims:
Understand the Policy Well in AdvanceÂ
Before disaster strikes a business, commercial property owners should already know what their property damage policy covers. Unfortunately, this can be somewhat difficult as most insurance policies are packed with difficult-to-decipher terms and enough legalese to make a policyholder’s head spin. In certain instances, this is done intentionally to make interpreting what is and isn’t covered difficult for the policyholder to understand. Regardless, it’s still critically important to thoroughly read and understand what a policy covers, excludes, and if any endorsements may need to be purchased to account for coverage gaps. Having the insight of legal counsel experienced in insurance claims can help policyholders have a more thorough understanding of their policies well before any property damage occurs.
File a Claim and Document the Damage
Insurance providers should be contacted as promptly as possible following commercial property damage. Policyholders hold the burden of proof to substantiate and document the losses sustained and should collect as much documentation on the damage as possible. Having too little information on the covered event can result in significant delays in the claims process and can even lead to wrongful denials. Â
Before anything is cleaned up or removed from the damaged property, photos and videos should be taken of all affected areas and of each damaged item. These should include detailed descriptions of the damage. Including information on when the loss occurred and any concerns regarding hidden damage can also help inform the insurance provider and adjusters about what to look for when investigating the claim.Â
Mitigate Any Additional Damage
After the initial damage occurs and has been documented, insureds are required to make temporary emergency repairs to prevent any additional losses resulting from the original damage. For instance, damaged windows, doors, roofing, or other openings should be covered to protect against rain or other factors that could exacerbate the existing damage. However, these repairs shouldn’t be permanent so that the initial damage can still be showcased to the insurance company, as well as claims adjusters.Â
This is an incredibly important step in handling commercial property damage claims, as insurers can flat out deny coverage if it appears nothing has been done to mitigate further damage from occurring during the claims process.
Work With AdjustersÂ
Shortly after a claim is submitted, the insurance carrier will assign an adjuster to investigate. The adjuster will come out to the damaged property to review it, take photos, and ask the insured any questions they may have regarding the incident and the damage. The adjuster will assess the situation and determine whether the policyholder is liable, in whole or in part, for the damage and what is covered under the policy terms. In some instances, the policyholder may want to hire their own adjuster to evaluate the damage.
Know When to Hire an AttorneyÂ
Because insurance policies are legally binding contracts between an insurer and its insured, they must be properly abided by. Nearly every contract is subject to an implied duty of good faith and fair dealing. This duty requires that neither party act in a way that will destroy or injure the right of the other party to receive the full benefits of the contract. Â
Insurance companies are also required to abide by additional legal requirements that vary from state to state. The Texas Prompt Payment of Claims Act (TPPCA) requires all insurers to pay claims within 60 days of receiving all items, forms, and statements necessary to make a decision. If found to have acted contrary to its legal obligations, an insurer can be held liable and must pay interest and attorneys’ fees in addition to the claim amount. To recover these fees, a policyholder must prove they have a valid claim under their policy, that the insurer is liable for the claim, and that the insurer failed to comply with the TPPCA’s requirements. When an insurance company fails to fulfill its legal obligations and/or abide by the terms of its policy, it’s in the policyholder’s best interest to contact legal counsel.
Commercial Property Damage Coverage Attorneys
At Raizner Slania, we understand how cumbersome the commercial property damage claims process can be. While business owners are trying to get back on their feet after disaster strikes, insurance providers often look for ways to wrongly delay, underpay, or deny claims. Our firm has successfully handled claims against some of the largest insurance companies in the world regarding the use of bad faith claims handling tactics. If you are dealing with an insurance provider that has wrongfully delayed, underpaid, or denied your property damage claim, contact us today to see how we can help.
