Property Loss Claims

Property-Loss Claims: What Business Owners Need to Know 

Catastrophic events leading to property-loss claims can leave business owners feeling overwhelmed. Wildfires, storms, floods, or other disasters can disrupt operations, damage property, and create complex insurance claims. The recovery process can be made smoother if business owners are aware of what needs to be done after a loss and are able to prepare in advance. 

Step 1: Prioritize Safety 

During catastrophes, safety should be your topmost priority concern. It is crucial to remember that you must not return to your property until the authorities confirm it is safe. Look for hazards such as downed power lines, natural gas leaks, or unstable structures. If it is safe to proceed, turn off utilities like electricity, gas, and water. Avoid drinking tap water until it is confirmed safe. 

Step 2: Document the Damage 

Before making any emergency repairs, take photos or videos of the damage from different angles. Thorough documentation protects your property-loss claim and helps your insurer understand the full extent of damage. 

Step 3: Continue Business Operations 

If your building has become completely uninhabitable, find a temporary location to operate. Follow your contingency plan if available, or seek alternative space through friends, realtors, or industry contacts. 

A quick call to your insurance agency can also help confirm whether your policy includes extra expense coverage, which can reimburse the additional costs incurred to continue operations elsewhere. Note that typical commercial property policies cover fire, windstorm, or tornado events, but flood coverage may require a separate National Flood Insurance Policy. 

Step 4: Claim Lost Income 

If business operations are interrupted, your policy may include business income coverage. This coverage reimburses continuing expenses and lost income, placing your business in the same financial position it would have been without the loss. Work with your accountant to prepare a claim, as this can be one of the more complex parts of the process. 

Step 5: Work with the Adjuster 

When an insurance adjuster arrives, they will assess the damage, determine the cause (wind, flood, or both), and itemize the damaged property. Appraisals and repair estimates are collected later to establish values. Adjusters may provide an advance payment to allow restoration and temporary operations. It is essential to keep detailed records of all expenses. 

Step 6: Consider Hiring a Public Adjuster 

Public adjusters can assist in preparing the damage scope, inventories, estimates, and negotiating with the insurer. Their fees are typically 10–15% of the settlement. Hiring an adjuster is optional, but it can help if your property values are unusual or if the inventory is extensive. 

Step 7: Disagreeing with the Adjuster’s Valuation 

If you do not agree with the insurance company’s valuation:  

• Provide additional documentation supporting your claim.  
• Request to speak with the supervising adjuster if needed.  
• If disagreements persist, use the Appraisal provision, which allows each party to select an appraiser. Those two appraisers choose an umpire, and any agreement between two of the three sets the settlement amount. 

You can also file a complaint with your state’s Insurance Department if necessary. 

Key Takeaways 

• Safety first: never enter unsafe property immediately after a disaster.  
• Document all damage thoroughly before making repairs.  
• Confirm coverage for extra expenses and business income to continue operations.  
• Understand the adjuster process and maintain detailed records.  
• Consider professional help if claims are large, complex, or involve unusual property values. 

Preparation, clear documentation, and knowledge of your policy can make the property-loss claim process less stressful and help your business recover more quickly after a catastrophic event.