Unlike consumer insurance claims, commercial insurance claims involve much higher risk values and can frequently also involve far more dynamics affecting those expenses as well. No surprise, insurance companies apply their most seasoned adjusters when receiving a commercial insurance claim, as the results can be hundreds of thousands and even millions of dollars in liability otherwise. This is why it might be a good idea to maximize your claim with Doug Terry if pursuing commercial insurance coverage in Edmond, OK.
The goal of the adjuster, of course, is to reduce the value of the claim where possible to protect the insurance provider. However, that does nothing for the covered party who needs the financial coverage to recover. So, fundamentally, both interests are in conflict. These issues are worked out through documentation and negotiation, as well as whether the provider can also attribute the cost responsibility to other parties as well.
The Purpose of Commercial Insurance Should Drive the Claim
Obviously, people and businesses don’t contract out for commercial insurance for the sake of business networking or as a status symbol. It has a primary purpose of providing a safety net should something go wrong with the business that creates a serious financial loss. In the case of commercial property insurance, for example, the coverage protects loss of property, whether real estate or materials, so the company doesn’t take a financial hit due to disaster, damage, theft, or similar. In the general commercial arena, the protection provides a financial safety net should the business suffer a loss due to reliance on a business transaction.
The most common tend to be contractual issues that don’t follow through and create serious problems for the continuation of the business. If a supplier, for example, was expected to provide critical components on a set schedule and then fails to do so. The business may have already committed to order fulfillments and been paid for delivery. Now, the supplier’s failure becomes the business’ failure as well.
In the above regard, the claim should be accurate, comprehensive and include as much as possible for recovery so that the business doesn’t have to absorb the loss out of pocket. Otherwise, absent the claim or another offset, the business ends up having to absorb the damage out of company profits.
Intent on Settling
Insurance providers, consistent with the goal of keeping costs down, will also look to reduce and settle a claim as fast as possible. Experience and statistics support the conclusion that the longer a commercial insurance claim goes unresolved, the higher the cost gets for the provider many times. So, fast settlements close out issues before they percolate and grow. While the growth may be perfectly valid with accurate costs, an early settlement shuts the door, which works in the favor of the insurance provider paying out less overall.
While the process can seem demanding, the claimant is very much in control, not the adjuster or insurance provider. This can seem upside down when repeat calls for information keep coming in and deadlines get communicated about needing to make a decision right away. This is on purpose. In fact, nothing gets settled for up to a year to three years, depending on the jurisdiction, until the parties agree without a judgment.
Understanding the Adjuster Communications
The communication letters from an adjuster often required notices and warnings of coverage aspects that may be waived due to non-response. The coverage provider is required to provide the communication, but there is no obligation to explain the meaning of it or its ramifications. If the covered party doesn’t respond correctly, then the given coverage aspect might be closed and denied if brought up again later. Watching these communications and responding, even if needing more time to confirm status, keeps the coverage in play and open.
Interim Business Interruption Support
Some claims involve issues that a business needs to recover from right away. A covered party is usually under a duty to mitigate damages and control them versus letting the damage continue and keep adding to the costs of a claim, where possible. So, some commercial insurance policy may include a component for business continuity while recovering from the damage, but this shouldn’t be in lieu of another recovery. Watch out for this kind of substitution, as it could dilute and reduce an overall claim with the argument the recovery was already provided when it was really for a different kind of protection.
Cash Value vs. Replacement Value vs. Covered Value
One of the big dispute areas tends to be the actual reimbursed value for loss, especially when it involves materials that need to be replaced. Insurers tend to use actuarial tables adjusted for inflation and depreciation of market value over time, but that doesn’t do much for providing the means to actually replace the lost materials after the fact. If coverage has been contracted for that includes replacement value versus market value, then a covered party needs to make sure what is approved by the adjuster actually provides the same. If not, the settlement offer should not be accepted.
No position or decision from an insurance provider should be accepted by default. Everything is negotiable and can be worked out for potentially better coverage. However, it takes a lot of time, energy, and effort to stay on top of things. Adjusters are trained in this process, but the average business owner or manager is not. This is why companies need an advocate working in their best interests during the processing of a commercial claim. This allows the negotiation effort to be focused and productive versus exhausting.
Complex But Doable
Commercial insurance in Edmond, OK, is probably one of the more challenging areas to deal with operating a business, especially when trying to get back into operations and recover at the same time. However, it is doable, and successful representative claims are very possible. Businesses need to have the ability to dedicate a specific resource to the task, which is why commercial insurance representation is such a good idea. Rather than trying to make in-house personnel handle an area that is very much outside their wheelhouse, it’s a better idea to bring in a subject matter expert who can dedicate full time and resources to the matter for the best outcome.