There are a number of disasters people hope to never face and your business catching fire is up near the top of that list. As much as we don’t want to ever have to face this disaster, business fires do happen.
So what should you do if your company does experience a fire? We asked COUNTRY Financial Insurance Agent Cody Walton that very question.
Q: What are the immediate actions a business owner should take if their business experiences fire damage?
A: Once everyone has safely evacuated the building and emergency services have been called, you’ll want to notify your insurance company immediately to get the claim process started. When it is safe and cleared by the fire department, we recommend taking photos and videos of the damage for evidence. If possible, take steps to prevent additional damage, such as boarding up windows or covering the roof.
Q: How important is it to contact the insurance company right away, and what information should be provided initially?
A: It’s crucial to contact your insurer immediately because most policies have time limits for reporting claims and delaying this can lead to complications with the claim. You’ll usually need to provide your policy number, a brief description of the incident (if known), and your contact details.
Q: Can you explain the key elements of a typical business insurance policy that covers fire damage?
A: A typical policy includes property coverage for damage to the building and equipment, business interruption insurance for lost income, and liability coverage for third-party claims.
Q: What should business Owners look for in their Policy to ensure they are Adequately covered for fire Damage?
A: Ensure that your policy includes replacement cost coverage, extended business interruption coverage, and provisions for debris removal and cleanup. It is best to review your insurance policy annually with your agent to ensure that your coverage continues to align with your business needs.
Q: What types of documentation are essential for filing a fire damage claim?
A: You’ll need photos/videos of the damage, inventory records, receipts/ invoices, and a fire department report. I recommend keeping digital backups of all critical documents for easy access during a claim.
Q: Are there any common mistakes business owners make when documenting damage that could affect their claim?
A: Try to avoid mistakes like insufficient photos, missing inventory items, and delayed reporting, as they can weaken your claim. I recommend creating a detailed inventory list regularly and updating it as your business assets change.
Q: How does the fire damage claim process typically work, and what can business owners expect at each stage?
A: The process includes reporting the damage, an adjuster’s assessment, submitting documentation, negotiating the estimate, and receiving a settlement. It is best practice to stay organized and maintain communication with your insurance company throughout this process.
Q: Are there any specific deadlines or time frames that business owners should be aware of when filing a claim?
A: The deadline to report a fire insurance claim generally depends on the specific terms outlined in your insurance policy, so be sure to review your policy for exact timelines. However, it’s generally advisable to report a fire claim as soon as possible, ideally within 30 days. Delaying the report can result in denial of coverage or reduced compensation.
Fire Facts
Fire and explosions rank as the largest single cause of corporate insurance losses, making up 21% of insurance claims in recent years (Allianz Commercial).
In 2022, non-residential structure fires in the U.S. caused an estimated $4 billion in direct property damage, involving around 140,000 reported fires (NFPA).
Q: What is the role of an insurance adjuster in the fire damage claim process?
A: The adjuster assesses the damage, estimates repair costs, negotiates with you, and approves the claim. To ensure that all damage is noted, it is recommended that you are present for the adjuster’s visit.
Q: What options are available for businesses that need to temporarily relocate due to fire damage?
A: If the premises are uninhabitable, insurance may cover temporary relocation expenses, such as leasing another space or working from home. I recommend confirming with your insurer which temporary relocation costs are covered.
Q: How does business interruption insurance work, and what should owners know about it?
A: This insurance is designed to compensate your business for lost income and ongoing expenses during downtime. Be aware of any waiting period before coverage begins, and what your policy’s coverage duration is.
Q: What should business owners consider when choosing a contractor for restoration and repair after a fire?
A: Select a licensed, insured contractor experienced in fire restoration. I recommend seeking referrals from your insurer or other local business owners for reputable contractors.
Q: How often should business owners review and update their insurance policies to ensure adequate coverage?
A: Review and update your policies annually or after significant changes in your business, such as expansions or new equipment. It is best practice to schedule an annual review with your insurance agent to keep your coverage up to date.
Q: What changes in a business could necessitate an update or adjustment to their fire damage coverage?
A: Significant changes like expanding your property, acquiring new equipment, or altering operations should prompt an update to your coverage. You should reassess your insurance needs with your insurance agent whenever your business undergoes any major changes.
CODY WALTON
advisors.countryfinancial.com/ usa/nd/west-fargo/cody/walton
701-353-6069