The Challenges of Commercial Property Loss Claims

As commercial property owners and managers, we don’t often reflect on our property insurance policies. We tuck them away in computers or paper files to revisit when the bill comes due or disaster strikes. Upkeep, tenant issues, sales, regulatory paperwork – everyday matters easily take precedence over coverage contemplation. 

It’s worth thinking about what would happen if you filed an insurance claim. “Making a successful claim is rarely as easy as making a phone call,” says Leslie Anderson, Vice President of Training for Paul Davis. “We advise customers to practise walking through the claims process, making sure they ask themselves how a claim would proceed and if they are prepared. Often carriers are happy to help customers do this.” Anderson listed typical questions that uncover pending claim difficulties.

Does my insurance cover the types of claims I might make?

Evaluate the risks of your location, building and business type. Experts point to this list of typical claims: fire and smoke; flood, water and mould; storm damage including hail, wind and rain; vandalism and theft; loss of use/income; equipment damage, business interruption and personal injury. Ensure that your policy covers the risks that could threaten your particular business, property and occupants.

What do I have to do if I experience a loss?

Most property owners know to call the carrier and record evidence of the damage. Many policies, however, also require reasonable efforts to prevent further damage after the loss occurs. Did a tornado remove a maintenance shed door? If you can safely move the undamaged lawn care equipment stored inside, your company won’t cover rain damages to that equipment that occurs days after the tornado.

Did you take reasonable precautions to avoid damage?

Carriers won’t cover losses due to poor maintenance. To prove your property structures were properly maintained, keep maintenance, purchase and inspection records to prove structural systems were in good repair or replaced. Ensure you schedule regular maintenance of these systems, too. 

Do you take precautions to avoid carelessness?

Carriers won’t cover damage that could have been avoided through reasonable precautions. Did the last person out fail to lock the door and security cameras recorded the oversight? Expect pushback if you file a theft claim.

Do you comply with applicable regulations?

Similarly, carriers won’t cover losses that resulted from failure to follow regulations and laws. Did a small fire in the kitchen encompass the first floor because you didn’t provide the fire extinguishers required by your municipality? Your carrier will look askance at your fire damage claim.

Do I have the paperwork I might need?

Carriers will ask for proof of ownership and value to verify and quantify your loss. Keep receipts and purchase records – as well as the maintenance records mentioned above – in a safe, centralized location for easy retrieval to support a possible claim. 

Would you like to know more about protecting your commercial property from loss? Do you need help recovering from a commercial property loss? Call Paul Davis at 844-215-7898.