One of the pitfalls you will always want to avoid is waiting too long to file a liability claim with your commercial insurance company.
Liability claims typically move quite slowly. Generally speaking, the time between the initial claim or complaint being filed and the end of the court proceedings frequently takes months, and it is not rare for it to take more than a year.
Because we are human, business owners will often ignore the whole thing and hope it will go away. Or they may retain an attorney to offer them advice as to how to make it go away. Or they may wait until months after the problem before they notify their commercial insurance agent or company.
Any one of these actions — or inactions — can ruin your coverage of the liability claim, whether the original incident is covered under the liability claim.
If you read your business liability policy, it is very likely that it states that the policyholder must notify the insurance company if a situation which could result in a claim has occurred. The reason for this is that when you notify your insurance company immediately, they have time to investigate the incident as well as to prepare a defense if that is necessary.
When the business owner waits too long, the company may deny the business liability claim because of the lack of proper notice.
As a matter of course, you should have a lawyer with whom you work with issues which affect your business. It is possible to have your commercial insurance company compensate your attorney, but you must start the claims process early and not later.
Regarding your business liability claim, your insurance company and the policy will spell out the litigation process and the course of defense.
Make sure that you understand your present liability coverage and check with your licensed insurance professional to make sure it’s what you need.
One problem we see throughout the insurance industry is clients waiting too long to file a claim with their agent and their insurance company, especially liability claims. Liability claims are slow moving, take time, and typically run from the initial complaint or claim and end up in court.
This time frame will usually span several months or longer. Waiting to file can further delay and be very frustrating to all involved. Facts and memory gets blurred causing more questions and delays. All too often, business owners wait until several months have passed, or even longer before notifying their insurance company. Even worse, some owners try to block it out and hope it will just go away on its own or retain their own counsel to investigate and try to initially offer advice or a quick remedy when it’s a liability or potential liability claim of damage.
Waiting or trying to resolve a potential claim can jeopardize coverage for a liability claim, even if that scenario is actually covered under the liability policy of the business. A business liability policy typically states a policyholder needs to notify the insurance company if a situation has occurred that could result in a claim. Notifying your insurance company immediately, they have time to both investigate and prepare a defense if necessary. By waiting too long, the company may deny the claim due to a lack of proper notice or agree to settle due to a lack of time to prepare a defense.
Don’t delay filing a property damage claim with your insurance company either. Many claims seem to get delayed by a lack of understanding coverage or deductibles. If you have a property loss, review it with your commercial broker. Delays here can result in denials if not properly handled.
Your business should always have an attorney it works with. When it comes to a liability claim, your policy and the insurance company will spell out the litigation process and course of defense. It is possible to have your insurance company compensate your attorney, but you must start the process early on and not later. Make sure to review your present liability coverage with your commercial insurance broker.