Fire damage can be incredibly overwhelming for commercial property owners to deal with. While the fire itself may not completely destroy the business, it can cause burn damage to important equipment and documents, as well as leave behind widespread smoke damage throughout the property. When these incidents happen, it’s important that commercial property owners know what things to consider when filing a commercial fire damage insurance claim.
Filing a Commercial Fire Damage Insurance Claim
No matter the type of business, fires have the potential to break out at any time. Whether it’s a grease fire at a restaurant or an electrical fire at a tech company, a blaze on the business property can quickly cause operations to shut down for some time or even permanently depending on the severity. Because of the various risks that come with fire, it’s imperative that business owners obtain proper insurance coverage for these events with a commercial property policy under which they can file a claim to cover the resulting damages.
Once a commercial property claim for fire damage is filed, the insurer will likely send the insured a proof of loss form or send a claims adjuster out to review the damage. After the adjuster surveys the fire damage, they will send their findings back to the insurance company to determine the outcome of the claim. Unfortunately, in these situations, insurers can choose to delay, undervalue, or completely deny valid claims for fire damage. While this can understandably be frustrating for business owners, taking care of certain items during the initial claim filing can help policyholders better ensure their claim is properly investigated in order to obtain the funds necessary for the repair or replacement of property.
Things to consider when filing a commercial fire damage insurance claim include:
Reviewing Commercial Coverage
Business owners should review their existing commercial property coverage well before a fire occurs. While most commercial policies cover fire damage to the building, its contents, and the property of others in the business’s care, each policyholder’s coverage can vary depending on the terms of the insurance policy. Though most commercial plans will cover direct fire damage, policy endorsements can add more coverage for perils incidentally related to fire, such as fire department fees or damage from falling objects.
Ensuring a business has sufficient coverage before a potential fire begin can help give owners the peace of mind that their investment will be well protected from fire damage. Not only that but having a good understanding of policy coverage overall can give policyholders an upper hand should an insurer attempt to wrongly delay or undervalue a claim.
Maintaining Documents and Receipts
After an insurance claim has been filed, the claim investigation will require policyholders to provide as much information about the property before and after the loss occurred. While many policyholders are aware of the need to submit photos and videos of the damage, they may not know that it can be incredibly beneficial to also submit thorough documentation of the building’s condition beforehand, as well as to maintain all necessary documents and receipts for all items the business owns. It’s also important to note that even if photos and videos are taken after the damage has occurred, the insured should not throw away any damaged property until after the claim has been processed, as this can impact the outcome of the claim.
Business owners should collect any relevant records they may need to prove the value of their property, damaged equipment, inventory, and/or any other structures that may be included in a claim. The same also applies when seeking to obtain business interruption coverage after fire damage has occurred. Businesses will need to provide proof of income to their insurer for the amount the company generated before the event and the amount the company is able to generate after the event. This can include financial documents such as tax returns, monthly sales, business contracts, budgets, financial statements, and other items.
Monitoring Claim Progress
While it can be tempting to hand everything off to the insurance company and hope the claim will be processed in a thoughtful and timely manner, this often doesn’t happen. Insurance providers can cause major delays in claim processing in the hopes the insured will simply give up on the claim altogether. By monitoring the progress of a fire damage claim, business owners can make a big difference in ensuring a claim is resolved promptly.
Keeping detailed records together and planning to regularly contact the insurance company to check on the progress of a claim can help with a claim’s progress. It can also be helpful to consult with legal counsel regarding how to proceed if it appears the insurance company is slow to act on the claim.
Under the Texas Prompt Payment of Claims Act (TPPCA), insurers must undertake prompt investigations and payments of insurance claims. Under the Act, all insurers must pay claims within 60 days of receiving all necessary items, forms, and statements. If a carrier is found to have acted contrary to its legal obligations, it must pay interest and attorney’s fees in addition to the amount of the claim. To recover these fees, a policyholder must prove they have a valid claim under their policy, the insurer is liable for the claim, and the insurer failed to comply with the TPPCA’s requirements.
Mitigating Further Damage
Each property policy requires the policyholder to take reasonable steps to minimize further damage to the property after a covered event occurs. The insurance company will pay the costs associated with mitigating the damage, but only with proof of the damaged property and items submitted before taking action.
One of the ways commercial policyholders can mitigate further fire damage is by stopping any ongoing smoldering. After a fire, if the structure is still burning, property owners should contact the fire department to investigate and stop further burning of the property to prevent a flareup. The property should also be boarded up or covered with a tarp to protect it from others and outside elements.
Reporting Any Vandalism to Police
Unfortunately, fire-damaged properties often become targets for vandalism. When a property is left inoperable for a period, it may appear abandoned – leading others to potentially inflict further damage and/or steal items from the property. As soon as a commercial property owner suspects something has been stolen or the property has been vandalized, they should contact the police as well as the insurance company.
Contacting an Attorney
Insurance contracts of any kind are legally binding between the insurer and its insured, and they must be properly abided by. Nearly every policy is subject to an implied duty of good faith and fair dealing that prohibits the carrier from acting in a way that will destroy or injure the right of the policyholder to receive the full benefits of the policy. Despite this, insurers often attempt to thwart the system through the use of bad faith tactics as a means to benefit themselves. Whenever a commercial property owner suspects their insurer is acting in bad faith, they should contact a lawyer immediately.
Insurance coverage attorneys know the methods insurance providers use to delay, undervalue, or deny valid claims at the expense of policyholders. In addition, insurance policies are purposefully written with complex verbiage and jargon to make it more difficult for policyholders to understand the coverage parameters. An attorney can help policyholders better understand their coverage before an incident even happens, as well as hold insurers accountable for bad faith actions.
Insurance Coverage Attorneys
At Raizner Slania, we understand how cumbersome the commercial property damage claims process can be after a fire has occurred. While business owners are trying to get back on their feet, 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 fire damage insurance claim, contact us today to learn more about how we can help. Contact our office today for more information.
