How to claim on your business insurance

What is a business insurance claim?

A business insurance claim is a formal request for compensation from your insurance company following a loss. For instance, you might claim as a result of damage to your business premises or an employee suffering an injury. 

Once you make a claim, your insurer will investigate, and assuming everything checks out and your policy provides adequate cover, your insurer will issue a payment to you or the third party involved in the claim. 

What can you claim for?

Exactly what you can claim for will depend on the type of business insurance you have. There are several types of business insurance, each covering different risks. Below is a list of some of the most common types of business insurance policies and when you might claim on them: 

Public liability insurance claims

Public liability insurance covers the costs incurred if a member of the public sues you due to loss or damage to their property or personal injury. The incident that led to the claim doesn’t have to have occurred at your business premises. 

For example, if you run a cleaning business, you’d be covered if someone slipped on a wet floor and broke their arm.

Public liability insurance can cover:

• Loss of earnings if the third party can’t work due to injury 

• Medical and transport bills

• Legal costs

• Future loss of earnings

Employer’s liability insurance claims

Employer’s liability insurance covers the cost of a claim made by an employee who sustains an injury or suffers damage to their property while working for you. It can cover legal expenses, compensation payments and other costs associated with the claim. 

For example, your policy would cover you if an employee was injured when using machinery.

You are legally required to have employer’s liability insurance as soon as you become an employer. Your policy must cover you for at least £5 million, and an authorised insurer must provide it. 

Professional indemnity insurance claims

Professional indemnity insurance can cover the cost of any compensation you need to pay if a claim is made against your business by an unhappy client. It can be particularly important if you work with clients’ data, provide advice or publish works about other people or companies. 

For instance, a client might claim if they lose money after following advice you’ve provided or if you lose valuable documents or data.  

Business interruption insurance claims

Business interruption insurance protects your business against loss of income due to an unexpected event. 

It pays out if your business has to stop trading temporarily due to a fire or flood at your business premises, for example, or because essential business equipment has broken down. 

Commercial property insurance claims

If you own your business premises, commercial property insurance helps to protect the bricks and mortar of your building. It covers you against the cost of repairing flood or fire damage, for example. It also includes cover for deliberate damage due to a burglary or break-in.  

Other business insurance types include goods in transit insurance and legal expenses insurance. 

How to make a business insurance claim

Before making a business insurance claim, read through the small print of your policy, paying attention to any exclusions, to check that you are eligible to claim. Once you’re ready to make a claim, follow the steps below:

1. Gather together the necessary information

Your insurance company will ask for certain information when you make a claim, so it’s worth checking you have the following to hand:

• Your policy number

• Contact information for you and anyone else involved

• A detailed description of what happened

• The date of the incident

• Any crime reference number the police have given you (if you’ve suffered loss or damage due to a burglary, for instance)

• Proof of purchase if you’re claiming for stolen goods (e.g. receipts)

• Business accounts data if you’re claiming for loss of earnings

• Photos of any damage you’re claiming for, plus CCTV footage and witness statements, if applicable

2. Contact your insurance company 

Your next step is to contact your insurance company. It’s best to do this as soon as possible. Your insurer could deny your claim if you don’t report the incident quickly enough. You can often contact your insurer online.  If not, ring them using the phone number on your policy documents. 

You should also contact your insurer if you’re worried about a situation that could turn into a claim – for example, if someone has suffered an injury on your premises or a data breach occurs. An early warning can help ensure the insurer resolves the matter quickly. 

3. Fill in the necessary paperwork

Next, fill in any required paperwork. Your insurance provider might send you a form or direct you to one on its website. It’s important to fill this in as soon as possible, providing all the necessary details and any evidence you gathered in Step 1. Be as accurate as possible – any mistakes could delay your claim or even lead to your insurer rejecting it. 

Once you have filed your paperwork, you can only wait for a decision. How long this takes depends on the complexity of the claim. In some cases, it could be a few days. In others, a few months. 

Why was my business insurance claim rejected? 

There are several reasons why your insurance provider might reject your business insurance claim. These include:

• Your policy doesn’t cover your specific claim

• The size of your claim exceeds the limit of cover provided under the policy

• You haven’t been able to provide sufficient evidence – for example, you don’t have any receipts to prove how much your stolen tools are worth

• You haven’t followed the correct claims process – for example, you haven’t included important details such as the date and location of the event

If you think your insurance provider unfairly rejected your claim, you should complain to it in writing. It’s important to keep a record of all correspondence. Your insurer has eight weeks to respond. If you are still unhappy with the outcome, you can take your complaint to the Financial Ombudsman Service.