Why Insurers may Refuse Claims from your Company

Commercial insurance policies are designed to protect businesses from unexpected losses. However, just because a business has an insurance policy does not guarantee that they will receive coverage when they file a claim. Insurance companies have a responsibility to properly evaluate claims and only pay out when the terms of the policy have been met. Here are some reasons why insurers may refuse claims from commercial companies:

The policy does not cover the event or item in question

Just like with personal insurance policies, commercial insurance policies may not cover every possible type of loss. For example, a business insurance policy may not cover losses related to cyber attacks or employee theft. It is important for commercial policyholders to carefully review their policies and understand what is and is not covered before filing a claim.

The business did not disclose relevant information

When applying for a commercial insurance policy, businesses are required to disclose certain information about themselves or their operations. For example, a business may need to disclose any hazardous materials they store or any prior legal disputes they have been involved in. If a business fails to disclose relevant information, the insurance company may refuse to pay out a claim.

The business did not follow the terms of the policy

Commercial insurance policies often have specific requirements that businesses must follow in order to be eligible for coverage. For example, a business insurance policy may require the business to install certain safety equipment or maintain a certain level of security in their building. If the business fails to meet these requirements, the insurance company may refuse to pay out a claim.

The claim was made after the policy had lapsed or been cancelled

Commercial insurance policies require regular premium payments in order to remain active. If a business fails to make their premium payments on time, their policy may lapse, meaning that they are no longer covered by the policy. Similarly, if a business cancels their policy, they will no longer be covered.

The claim was fraudulent

Unfortunately, just like with personal insurance policies, some businesses try to commit insurance fraud by filing false claims. This can include exaggerating the extent of a loss, claiming for items that were not actually lost or damaged or intentionally causing the loss in question. If an insurance company determines that a claim is fraudulent, they may refuse to pay it out and may take legal action against the business.

In conclusion, insurers may refuse claims from commercial companies for a variety of reasons. It is important for businesses to carefully review their policies, disclose all relevant information, follow the terms of the policy and be honest when filing a claim. If a claim is refused, businesses can contact their insurance company to discuss the reasons why and to see if there are any steps they can take to rectify the situation. By understanding their policy and fulfilling their obligations, businesses can help ensure that they are protected in the event of an unexpected loss.

Ascend understands commercial insurance inside and out! If you need expert help with anything relating to your risk or cover, then do give us a call and we will be able to help you find the best policy at the best price. 

Other blogs that may be of interest:

Guide to Motor Claims Inflation

Any questions? Please don’t hesitate to contact one of our team.

paul.bennett@ascendbroking.co.uk  |  Office: 01245 449060