Business Insurance Claims FAQ

Businesses most frequently file claims for property damage (due to fire, storm, or theft), business interruption (loss of income after a covered event), professional liability (errors and omissions), and general liability (accidents or injuries on your premises). We see many disputes arise when insurance companies contest the damage or the cause of the harm to your business that should be be covered or paid for by another entity.

First, take immediate steps to mitigate further damage and ensure the safety of your employees and customers. Second, document everything extensively with photos, videos, and written notes. Third, notify your insurance company as soon as possible to begin the claims process. Do not throw away any damaged property until it has been inspected. Lastly, you should contact a qualified expert like Saxton Law to provide a free evaluation regarding whether you need an attorney.

A Reservation of Rights letter is a notice from your insurance company stating that they will investigate your claim, but they are “reserving the right” to deny it later. Yes, you should be very concerned. This is often the first step an insurer takes toward building a case for denial. It’s a clear signal that you should have your claim reviewed by an experienced attorney.

Not necessarily. Business interruption coverage can often apply even in cases of a partial shutdown or if your operations were significantly hindered. Insurers frequently misrepresent policy provisions in order to save money at your expense. We can analyze your policy to determine the full extent of the coverage you are owed for both complete and partial interruptions.

Proving lost income requires meticulous documentation. You will need to provide historical financial records (profit and loss statements, sales records, tax returns) to project what your income would have been had the event not occurred. Our attorney and staff have considerable experience in developing a clear record of the financial impact to your business in order to present your claim for the best possible outcome. For more information, see this article on how to calculate the value of a business insurance loss.

This is a critical and confusing distinction. Replacement Cost Value (RCV) is the cost to replace your damaged property with new property of similar kind and quality, without deducting for depreciation. Actual Cash Value (ACV) is the replacement cost minus depreciation. Many disputes arise from insurers undervaluing property or applying excessive depreciation. Our office can assist in navigating such problems in order for you to receive what you are owed.

Yes. If your insurer has denied a valid claim, or denied part of your valid claim, you have the right to file a lawsuit to compel payment. Furthermore, if the insurer denied the claim without a reasonable basis or failed to conduct a proper investigation, you may also have a claim for damages beyond what you would normally be entitled to because of the bad faith conduct of the insurance company that was supposed to protect you.

Bad faith is any unreasonable or malicious delay by an insurer to avoid their responsibilities to you. Examples include failing to investigate your claim promptly, deliberately misinterpreting your policy, making unreasonable documentation requests to create delays, or threatening you to accept a lowball settlement offer.

Absolutely not. Do not sign any releases, waivers, or final settlement documents without having them reviewed by your own attorney. Signing a release will likely prevent you from ever seeking further compensation for that claim, even if you discover additional damages later. The adjuster’s primary goal is to close your claim for the lowest possible amount.

Both Missouri and Kansas have laws requiring insurance companies to act in good faith and handle claims promptly. While there isn’t a fixed number of days for every type of claim, an unreasonable delay in the investigation or payment process can be evidence of bad faith. If you feel your claim is being dragged out, it’s time to seek legal counsel. You can find more information from the Missouri Department of Insurance and the Kansas Insurance Department.

Exclusions are loopholes in your policy that allow the insurance company to avoid payment. However, insurers frequently apply exclusions improperly in order to save money at your expense. We can scrutinize the policy language to see if the exclusion truly applies to your specific situation. More often than not, the exclusion the insurer is trying to use to avoid payment is incorrect or outright fraud. For further reading, please see our article on exclusions and limitations in business insurance policies.

An Examination Under Oath (EUO) is a formal proceeding where you are questioned by the insurance company’s lawyer under oath. Most business insurance policies require you to comply with a request for an EUO. It is a serious matter, and you should never attend an EUO without your own attorney present to protect your rights.

Underpayment happens often as a tactic for the insurance company to save money while technically acknowledging your valid claim. If the insurer has paid a portion of your claim but you believe the amount is insufficient to cover your losses, you can and should dispute their valuation. This involves presenting your own evidence, such as independent repair estimates or a detailed loss of income analysis. This is very difficult to accomplish without experienced counsel and we are happy to help. Read more on what to do if your business insurance claim is denied or underpaid.

While a public adjuster can be helpful in documenting damages, only an attorney can legally represent you, file a lawsuit, and fight the insurance company in court. If your claim is complex, has been questioned by the insurance company, or involves a Reservation of Rights letter, an attorney is essential to level the playing field against the insurer’s legal team.

At Saxton Law Firm, we typically handle these cases on a contingency fee basis. This means you pay no upfront legal fees. We only get paid if and when we successfully recover money for you. This allows your business to pursue its claim without any additional financial strain during a difficult time.