What to Do After a Business Insurance Claim: A Step-by-Step Guide

Something happened. A pipe burst in your office and flooded your inventory. A customer slipped on your sidewalk and broke their ankle. A vehicle backed into your storefront. A fire damaged your workshop. An employee was injured on a job site. Whatever the incident, you're now facing something most business owners dread: filing an insurance claim. The good news is that this is exactly what your insurance is for. The bad news is that most business owners have never filed a commercial claim before and don't know what to expect. A poorly handled claim can result in delayed payments, reduced settlements, or outright denials — not because the claim isn't valid, but because the process wasn't followed correctly. This guide walks you through exactly what to do, step by step, from the moment an incident occurs through final resolution.

Step 1: Secure the Scene and Prevent Further Damage

Your first priority is safety. Make sure no one is in immediate danger, and take reasonable steps to prevent the situation from getting worse. If there's a water leak, shut off the water supply. If there's a fire, evacuate and call 911. If a structural element is compromised, keep people away from the area.

Once the immediate danger is addressed, take reasonable steps to mitigate further damage. This is actually a requirement under most insurance policies — you have a duty to protect your property from additional harm after an incident. Covering a broken window with plywood, placing tarps over damaged inventory, or turning off electrical systems in a flooded area are all examples of reasonable mitigation.

Keep receipts for any emergency expenses you incur during this step. Reasonable mitigation costs are typically covered under your policy, but you'll need documentation to support the reimbursement.

Important: Do not make permanent repairs until your insurance company has had an opportunity to inspect the damage, unless the repairs are necessary to prevent further loss. Fixing everything before the adjuster arrives can complicate your claim.

Step 2: Document Everything

Documentation is the single most important factor in how smoothly your claim will go. Start documenting as soon as the scene is safe.

Photographs and Video

Take extensive photographs and video of the damage from multiple angles. Document the overall scene and context, close-up details of specific damage, the condition of surrounding areas (to show the extent and boundaries of the damage), any equipment, inventory, or property that was affected, and serial numbers, model numbers, or identifying information on damaged items.

Use your phone's timestamp feature and make sure location services are enabled so your photos include date, time, and GPS data. Take far more photos than you think you need — you can always discard extras, but you can't go back and photograph damage that's already been cleaned up.

Written Records

As soon as possible, write down everything you remember about the incident. Include what happened, in as much detail as you can recall, when it happened (date and time), who was present or involved, what was damaged or lost, the sequence of events leading up to the incident, and any statements made by witnesses, employees, or others at the scene.

Memory fades quickly, and details that seem obvious now may be difficult to recall weeks later when the adjuster asks about them. Write it down while it's fresh.

Financial Records

Begin gathering financial documentation related to the loss. This includes inventory records and purchase receipts for damaged goods, equipment purchase records and depreciation schedules, repair estimates from contractors or service providers, payroll records if employees are affected, revenue records if your business operations are disrupted, and lease agreements if a landlord is involved.

Step 3: File a Police Report (If Applicable)

If the incident involves theft, burglary, vandalism, arson, or a vehicle accident, file a police report immediately. Many insurance policies require a police report as a condition of coverage for these types of claims. Even if it's not required, a police report creates an official record of the incident that supports your claim.

For workers' compensation claims in Washington, workplace injuries must be reported through L&I. The injured employee should file a claim with L&I as soon as possible, and you as the employer should complete your portion of the reporting promptly.

Step 4: Notify Your Insurance Agent

Contact your insurance agent or broker as soon as reasonably possible after the incident. Most policies require "prompt" or "timely" notice of a loss, and delayed notification can create problems with your claim.

When you call your agent, be prepared to provide the date, time, and location of the incident, a brief description of what happened, the type and estimated extent of damage or injury, whether anyone was injured, whether a police report was filed, and your policy number.

Your agent serves as your advocate in the claims process. They can help you understand what your policy covers, guide you through the filing process, and communicate with the insurance carrier on your behalf. A good agent will help you navigate the process and flag any potential issues early.

When to Contact the Carrier Directly

In most cases, you should notify your agent first and let them initiate the claim with the carrier. However, there are situations where contacting the carrier directly is appropriate or necessary: your agent is unreachable and the claim is time-sensitive, the carrier requires direct reporting for certain claim types (some policies specify this), or you've been involved in an auto accident and need to initiate the claims process immediately through the carrier's 24/7 claims line.

Step 5: File the Formal Claim

Once your agent has been notified, the formal claims process begins. This typically involves completing a claim form (your agent or the carrier will provide this), submitting your documentation including photos, written account, and financial records, providing a proof of loss statement for property claims, and cooperating with the carrier's investigation.

The proof of loss is a sworn statement itemizing the damaged or lost property and its value. For large or complex losses, you may want to work with a public adjuster or your accountant to prepare this document accurately.

What Your Insurer Will Ask For

Be prepared to provide the following during the claims process:

• Incident details. A detailed account of what happened, when, and how.
• Proof of ownership and value. Receipts, invoices, appraisals, or other documentation showing that you owned the damaged property and what it was worth.
• Repair or replacement estimates. At least one estimate from a qualified contractor or vendor. The insurer may also arrange for their own estimate.
• Financial impact documentation. If claiming business income loss, you'll need to demonstrate the revenue impact with financial statements, tax returns, and sales records.
• Medical records. For liability claims involving injuries, medical records and bills from the injured party will be part of the file.
• Prior claim history. The carrier may ask about previous claims on the same property or policy.

Step 6: Work with the Adjuster

After you file a claim, the insurance company will assign an adjuster to investigate and evaluate the loss. The adjuster's job is to determine what happened, whether the loss is covered under your policy, and how much the carrier should pay.

Types of Adjusters

• Company adjusters are employees of your insurance carrier. They handle claims directly on behalf of the company.
• Independent adjusters are contractors hired by the carrier to handle claims, especially during high-volume periods or in areas where the carrier doesn't have staff adjusters.
• Public adjusters work for you, the policyholder, not the insurance company. You hire a public adjuster to represent your interests, prepare your claim, and negotiate with the carrier. Public adjusters typically charge a percentage (5% to 15%) of the claim payout.

During the Adjuster's Visit

When the adjuster visits your property to inspect the damage, be present if possible. Walk them through the damage, provide your documentation, point out any damage they might miss, and answer their questions honestly and completely.

Do not exaggerate or minimize the damage. Do not speculate about causes if you're not sure. Do not sign any documents without reading them carefully. And do not accept a verbal settlement offer — get everything in writing.

Step 7: Understand the Timeline

Commercial insurance claims don't resolve overnight. Understanding the typical timeline helps set expectations and reduces frustration.

• Acknowledgment: The carrier should acknowledge your claim within a few business days of filing. In Washington, insurers are required to acknowledge receipt of a claim within 15 days.
• Investigation: The adjuster will inspect the damage, review documentation, and investigate the circumstances. For straightforward claims, this may take one to two weeks. For complex claims (large property losses, liability disputes, or multi-party incidents), investigation can take several weeks to several months.
• Coverage determination: After the investigation, the carrier determines whether the loss is covered and how much they'll pay. They will issue a coverage letter explaining their decision.
• Payment: Once coverage is confirmed and the amount is agreed upon, payment is typically issued within 30 days. Washington state law requires insurers to pay undisputed claims within 30 days of reaching an agreement on the amount.
• Total timeline: Simple claims (a broken window, a minor theft) may be resolved in two to four weeks. Moderate claims (water damage, inventory loss) typically take one to three months. Complex or disputed claims can take six months to a year or more.

Common Mistakes That Delay or Reduce Payouts

Avoiding these common errors can significantly improve the speed and outcome of your claim.

Delayed Notification

Waiting too long to report a claim is one of the most common mistakes. Late notification gives the carrier a reason to scrutinize your claim more closely and, in some cases, deny it altogether. Report incidents promptly, even if you're not sure whether you'll file a claim.

Insufficient Documentation

The single biggest reason claims are underpaid is lack of documentation. If you can't prove you owned something, can't prove its value, or can't demonstrate the extent of the damage, the carrier will pay based on what you can document — which is often less than the actual loss.

Making Permanent Repairs Too Early

Fixing damage before the adjuster inspects it removes the evidence the carrier needs to evaluate your claim. Perform only emergency and temporary repairs to prevent further damage, and wait for the adjuster before doing permanent work.

Accepting the First Offer Without Review

The adjuster's initial estimate may not reflect the full cost of your loss. Review it carefully against your own documentation and repair estimates. If there's a discrepancy, provide your evidence and negotiate. You are not obligated to accept the first offer.

Throwing Away Damaged Property

Don't dispose of damaged items until the adjuster has inspected them and you have written authorization to do so. Damaged property is evidence that supports your claim.

Not Reading Your Policy

Understanding what your policy covers — and what it excludes — before you file a claim puts you in a much stronger position. If you're unsure about your coverage, ask your agent to walk you through the relevant sections of your policy.

What to Do If a Claim Is Denied

A denial doesn't necessarily mean the end of the road. If your claim is denied, take these steps.

Read the denial letter carefully. The carrier is required to provide a written explanation of why the claim was denied, including the specific policy language they're relying on.

Review your policy. Compare the denial reason against your actual policy language. Denials are sometimes based on misunderstandings of the facts, incorrect policy interpretation, or incomplete information.

Gather additional evidence. If you have documentation, expert opinions, or other evidence that contradicts the denial, compile it and present it to the carrier.

Request a formal review. Most carriers have an internal appeals process. Submit a written appeal with your supporting documentation and ask for a supervisory review of the decision.

Contact your state insurance commissioner. In Washington, the Office of the Insurance Commissioner (OIC) handles consumer complaints and can investigate whether a denial was handled properly. Filing a complaint with the OIC doesn't guarantee a reversal, but it does put the carrier on notice that their decision is being scrutinized.

Consult an attorney. For significant claims, consulting an insurance coverage attorney may be worthwhile. Many offer free initial consultations and can assess whether you have grounds for further action.

How Claims Affect Future Premiums

Filing a claim will generally affect your insurance premiums at your next renewal. The impact depends on the type of claim, the severity, and your overall claims history.

• A single small claim (under $10,000) may result in a modest premium increase of 5% to 15% at renewal, or it may have no impact at all if you have a clean history.
• A large claim ($50,000+) will almost certainly increase your premium and may cause your carrier to non-renew your policy, requiring you to find coverage elsewhere.
• Multiple claims in a short period (two or more in three years) will significantly increase your rates and may make it difficult to find coverage in the standard market.
• At-fault liability claims have a greater impact on premiums than property claims where you were the victim (like theft or weather damage).

This doesn't mean you should avoid filing legitimate claims to protect your premium. That's what insurance is for. But it does mean you should consider the cost-benefit for very small claims where the payout barely exceeds your deductible. For minor losses close to your deductible amount, paying out of pocket may be the better long-term financial decision.

Be Prepared Before an Incident Happens

The best time to prepare for a claim is before you need to file one. Keep an updated inventory of your business property with photos and values. Store copies of important documents (receipts, equipment lists, lease agreements) in a secure off-site or cloud location. Know your policy details — what's covered, what's excluded, your deductibles, and your limits. Keep your agent's contact information readily accessible. And review your coverage annually to make sure it keeps pace with your business.

At SmartInsured, we help Washington business owners understand their coverage, prepare for the unexpected, and navigate the claims process when incidents occur. If you're not confident that your current coverage would hold up when you need it most, get a quote and let us review your insurance program.