What to Know about Business Insurance Benefits

Free Insurance Quote Comparison

 Secured with SHA-256 Encryption

Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

Full Bio →

Written by

UPDATED: Jul 16, 2021

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.

Your business insurance benefits are designed to help your company get back on its feet after suffering a loss covered by the insurance policy. It is important that you understand how the business insurance benefits are paid, what you can do with the money, and how you can help get your payment faster. Understand your business insurance benefits, and get the most out of your policy.

How are Business Insurance Benefits Paid?

Business insurance benefits can be paid in a lump sum check verses incremental payouts depending on the type of claim. If you have a property damage to your building, your business insurance benefit is likely to be paid in a lump sum once the totality of the damage is assessed. However, if you have an inventory claim in which hundreds of thousands of dollars of inventory is stolen or damaged, your business insurance benefit checks may come in increments. Business insurance pays for individual items at replacement cost, meaning benefits will not be paid until you prove the cost of the item after you purchase its replacement.

Business Insurance benefit checks are written to the named insured. Therefore, if you own a bicycle shop and the business name is The Spinning Wheels, your business insurance benefit check will bare that name. If the business insurance benefit check is for damage to your building or property which has a mortgage or lien, the check will also have the mortgagee clause or bear the name of the mortgage company.

How You Can Spend Your Business Insurance Benefits

Once the insurance company pays a business insurance benefit check for damages that was done by a covered loss, it’s obligation to you is complete. How you rebuild your business is up to you. You may decide not to replace that 12 foot long counter that was in the bicycle shop which was crushed by the tree that came through your roof, opting instead for more floor space to show case your inventory. By issuing you a business insurance benefit check for your claim, the insurance company’s obligation to pay you for your covered damage has been satisfied and therefore, you can pretty much determine how you would like to spend the money. The notable exception to this is that mortgage lenders and lien holders must be paid and therefore, will normally be included on the business insurance benefit check.

How Long Will It Take to Get a Business Insurance Benefits Check?

Business claims can be intricate because the adjusters have to evaluate the situation fully. For example, you can file a claim to include several different types of loss: the building itself, inventory, business income that may have been insured against for loss, professional liability and more. Making a claim for business insurance benefits for a loss in one of the above categories requires a proof of loss and adequate documentation for support. A business income claim may require that you demonstrate your business earnings for the last year with proof of receipts, tax documents and the like. Not only does pulling together this documentation take time, but reviewing it for accuracy can take time as well. Insurance companies, however, are well aware that most business insurance benefits checks are the life line for a business that has been hit hard by a claim, and try to work with you as quickly as possible.

You can help speed up this process by gathering as much documentation a requested as soon as possible. Organize your business paper work ahead of time so that in the event of a claim, you have documentation and receipts at your finger tips. Electronically storing data and paper work can make this easy by giving a business the ability to just hand over a disk to your claims representative.

TIP:Make sure you always keep copies of any data to ensure that you have a back up. Make sure that you keep all records from your claim. It is not uncommon to have to file supplemental claims for additional damage in order to receive additional business insurance benefit checks.

Filing a business insurance claim is never fun, but you can work through it if you are prepared and stay on top of the insurance company after you file the claim. Remember to be polite and respectful, and do whatever is required to help the claim along. By being cooperative and on the ball, you can get your business insurance benefits in a timely fashion.

Free Insurance Quote Comparison

Enter your ZIP code below to compare cheap insurance rates.

 Secured with SHA-256 Encryption