Mishaps occur. That’s a simple fact of life and business. A claim occurs, and the question of who is at fault is secondary—this is precisely why you carry business insurance. There’s an exposure, and your policy is there to address it.
However, a lot of companies make a costly error that can significantly raise their insurance costs: they put off filing the claim. Knowing how important it is to report claims right away could save your business a lot of money.
Why You Must Report Every Claim Immediately
It is critical that you understand this principle: any type of claim, whether it pertains to general liability, workers’ compensation, or auto insurance, needs to be reported right away.
The sooner your insurance company is notified, the more they can step in and actively try to lower the claim’s cost.
Unfortunately, most people would rather put this call off. Whether it’s because of unclear internal processes regarding who should call or the common perception that “I don’t think it’s really our fault,” hesitancy can cost you a lot of money.
Direct Benefits: Lowering Damage and Liability Costs
The most effective way to reduce damages and keep costs under control is to report them right away.
1. Reducing the Cost of Workers’ Compensation Claims
Time is of the essence when an injury occurs. The earlier the insurance provider is informed:
- The sooner the worker receives care and treatment, the better.
- The sooner they can be steered toward recovery or physical therapy.
- The sooner they return to work, the better.
Maintaining a favorable Workers’ Compensation experience modifier (your future rating) requires a quick return to work, which lowers the overall cost of claims.
2. Minimizing General Liability Losses
The same is true for liability claims, where costs can add up rapidly. Consider a hasty contractor who accidentally started a building fire with a blowtorch.
Despite the sentiment, “We just caught a building on fire, but we don’t think it’s our fault,” the prompt call is essential. Before the lawyers become involved and begin to construct intricate scenarios, we can send out the claims adjuster. As a result, the adjuster can quickly mitigate the damage, manage the situation, and keep the whole incident from getting out of hand.
Protect Your Future: Keep Insurance Rates Down
The long-term financial health of your business is directly impacted by your prompt action. Your overall claim pricing stays manageable when claims are processed promptly and expenses are reduced. The best method to guarantee that your insurance rates remain low in the future is to do this.
