Ashley Minors Big commercial claims are often complex, so it pays to have the right people in your corner
If you’ve ever experienced a large commercial insurance claim, you’ll understand that the process can be both complex and time consuming.
When a loss occurs and the running of your business has been affected, you’ll want the confidence the claim is going to be dealt with quickly and fairly. This will involve knowing what to do and having the right information to supply to the insurance company.
Many business owners will be aware of the term ‘loss adjustor’ but not completely clear about exactly whom they act for and how a loss adjustor could help them. In the event of a large property and business interruption claim, a loss adjustor will be appointed by your insurance company to liaise with you, establish the cause of loss and whether or not it’s covered, and submit their recommendations to the insurance company in respect of what they believe should be paid.
An important point to consider is that while loss adjustors often stress that they provide an independent service, they are being paid by the insurer to act on the insurer’s behalf and represent their interests.
As part of the claim process, insurers and loss adjustors will look to establish the extent of liability. Whilst insurers will look to act fairly, interpretation of policy cover can be complex, as can agreeing the validity and value of a claim. Loss adjustors working for insurers will often have limited time to assist you, especially during very busy periods, such as seen during the recent flooding. In the event of a large loss therefore, you are best to employ your own loss adjustor to represent your interests.
A loss adjustor employed by you, will prepare, administer, present and negotiate the claim with your insurer on your behalf. Essentially, the loss adjuster will liaise directly with the insurers’ loss adjuster and all parties throughout the claim, to ensure matters progress as quickly and efficiently as possible. Your loss adjustor will work with you to ensure you achieve the best possible settlement under your policy.
You might well ask that if you use a broker, won’t they cover this? Your broker plays a key role in the handling of a claim. However, in the event of a large loss, the process will often be technically complex and very time consuming. Having a dedicated expert working on your behalf, who specialises in the process of handling large claims, will certainly make the claim progress faster and result in reduced stress for all involved.
A loss adjustor can be employed after a claim occurs. However, the costs can be significant, with fees typically ranging from six to eight percent of the total claim settlement. Where there is significant damage to buildings, stock, equipment and a loss of trade, this could mean a payment of tens or even hundreds of thousands of pounds.
There is a more economical way of sourcing the service of a loss adjustor however. Purchasing an insurance policy upfront will pay for a loss adjustor to work on your behalf in the event of a large claim (usually considered £5,000 upwards).
Annual premiums for policies for most businesses in the aftermarket sector typically range from £175 to £500. The premium is based on the underlying cost of the business insurance for the property and business interruption sections of cover.
Whist arranging a policy is viewed by some as yet another insurance cost, the peace of mind and certainty that a loss adjustor will be ready to represent you and your business at the time of crisis, is seen by others as an essential business expense.
WHAT ELSE WILL THE LOSS ADJUSTOR DO FOR ME?
A loss adjustor’s work will often involve the following:
- Attending your premises within 24 hours to establish the extent of the damage
- Attending meetings with insurers and dealing with correspondence
- Creating itemised inventories of damaged stock/equipment and sourcing valuations for replacement products (remembering that the responsibility of substantiating the value of the claim is down to the policyholder)
- Liaising with your accountants to ascertain and itemise loss of
trading profits to be claimed
- Arranging of building inspection by surveyors, contractors, engineers and architects
- Negotiation of interim claim payments from the insurer
- Sourcing of temporary premises