Controlling claims costs through timely reporting
You can help control the costs of claims by immediately reporting any allegation of property damage or bodily injury that is made against your business, even if the allegation is not an official claim. Timely reporting of incidents may also have a positive impact on your overall cost of insurance.
A number of insurance carriers have conducted studies showing that the later claims are reported, the more they cost to resolve.
Reporting claims promptly is part of your insurance contract
As the holder of an insurance policy, you have a contractual obligation to report claims as soon as possible. A good rule of thumb is to report losses within 24 hours of the occurrence and no later than 72 hours of being made aware of the situation. Many times, insureds are not aware of an incident until they receive suit papers advising of a potential claim. In these cases, notify your insurance agent immediately.
Timely claim reporting has many benefits:
A claim won’t go away because you don’t report it
Far too often, insureds try to handle an accident or loss themselves, only to end up notifying the insurance company after a judicial judgment has been entered against them. The insured then presents the claim to the insurance company, expecting to receive payment for the judgment cost, legal expenses, and court fees. Such delays could jeopardize your coverage.
If you fail to report claims promptly, you may receive a letter advising you that your insurance company is “reserving their rights” while investigating the claim, which may lead to a potential coverage denial for late reporting. You may have to hire your own attorney to defend you if a suit is filed, leading to time away from work and out-of-pocket expenses.
How to report a claim
Follow these steps to report a claim:
The information provided in this article is intended for general informational purposes only and should not be considered as all encompassing, or suitable for all situations, conditions, and environments. Please contact us or your attorney if you have any questions.