You won’t often have to make claim on your General Liability Insurance policy, but when an accident or lawsuit pops up that you need covered, you’ll want to know how the process works. Let this be your guide.
Maybe a customer had a slip-and-fall accident in your computer repair store. Or perhaps you’re being sued over an advertising injury. What do you do?
1. Alert Your Insurance Agent
Your insurance agent is one of your strongest allies in the claims process. Let them know about a potential claim as soon as you can.
“The reason for this is that businesses sometimes don’t realize all the policies they have available,” says
Alicia Dearn (@AliciaDearn), founder of law firm
. “Their broker is in a good position to help them look for coverage by making sure no policies are missed.”
Even if your General Liability Insurance policy doesn’t cover a claim, your broker can take a look to see if one of your other technology insurance policies will. They can also go review your Certificate of Liability Insurance so you understand what is and isn’t covered.
2. Give Notice to Your Insurance Carrier
If your insurance agent hasn’t done it already, provide notice to your insurance carrier that you have a claim. This process is sometimes called “tendering a claim.”
“I always recommend tendering broadly,” Dearn says. “This includes tendering to all possible carriers (past and present).” Businesses shouldn’t limit their options by holding back, she says. “They should hunt for coverage.”
And tendering doesn’t have to be complicated, Dearn says. “Notice of the claim and a copy of the letter or lawsuit is good enough.”
After notification, your carrier can start investigating and processing the claim.
3. Preserve Evidence and Keep Detailed Records
Generally, the easier it is for your carrier to investigate the claim, the quicker a case can be resolved. Immediately following an accident, collect pertinent evidence and witness statements and hold onto it for your carrier. Write down any communication you have with the injured customer, including any…
- Phone calls.
- Face-to-face conversations.
Documenting evidence may require a little forethought and planning. For instance, do you have a CCTV system installed in your office or storefront? Do you keep records of client communications? Consider these factors before an accident happens.
4. Ask Questions about Your General Liability Claim
If you’re ever confused about a claim or its status, feel free to talk to your agent or the insurance carrier’s representative handling your case. You might want to ask:
- What’s covered under your General Liability Insurance policy?
- Does this particular incident fall under its coverage?
- Is there a time constraint for filing the claim?
- What happens if the customer files a lawsuit?
- How do I get in touch with the agent working on the claim?
- When will there be a follow-up?
Even though your agent won’t be processing the actual claim, they can still help you if you have any questions.
5. Consider Your Options
You’ll probably be faced with a number of choices concerning your claim. Your insurance carrier and legal counsel may recommend one or more of the following options:
- Answer the claim. You could either admit to or deny the allegations of the claim and give an explanation. For example, say a client has a slip-and-fall accident on your premises and you witness it. The client simply wants compensation for their hospital bills. It might be a good idea to explain this to your carrier and admit to the allegations. That way the hospital bills are paid, the client is satisfied, and you avoid a lawsuit.
- Try to dismiss the claim. If it appears that the lawsuit against you is frivolous, your lawyer can motion to have it dismissed.
- Settle the claim. Lawsuits that end up in a court battle can become tremendously expensive. To avoid this possibility, your insurer may want you to reach a settlement out of court with the plaintiff.
In each of these scenarios, your General Liability Insurance can help pay for the associated expenses, such as attorney fees, court costs, and damages. Keep in mind that your policy likely has a deductible you’re responsible for paying.
When Should You Make a Claim on Your General Liability Insurance?
Dearn believes “claims should be disclosed immediately and fully.”
“There is almost never a good reason to hold back on disclosing a claim,” she says. “Failure to disclose can be a breach of your insurance contract and cost you a lot of money in lost coverage.”
Even if you don’t know whether a claim will be covered, it’s a good idea to let your insurance carrier know about it just in case. They’ll often be able to help you until they determine otherwise.
“And simply disclosing a claim, especially if it ends up not being covered, rarely results in a rate hike,” Dearn says. “Businesses have insurance for a reason. They should use it!”
Want to know more about your General Liability coverage? Check out “Answers to Technology Businesses’ Top Five General Liability Questions.”