4 Common Reasons Your Claim Could Be Denied

Tabak Insurance Agency has decades of experience helping business owners in the hospitality industry find comprehensive general liability, liquor liability, and commercial property insurance at the lowest prices.

For those wondering how do you file an insurance claim, here are the main steps:

  • Assess the situation, and report the incident to law enforcement, if necessary (for example, in the case of a battery or assault).
  • Contact your insurance agent who will explain the claim submission process in detail and collect all necessary information from you.
  • Work with the claims adjuster once your claim has been submitted; the adjuster will verify damages and guide you through the claims process.
  • Contact an attorney if any part of the claim is disputed by your insurer, or if the claim is complicated; an experienced attorney will be able to help facilitate the claims process and will fight to get you the most coverage.

Below we’ve outlined some of the most common reasons claims are denied. The best way to ensure that you are fully covered and that your claim is fully paid is to consult with our expert agents to secure comprehensive coverage.

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4 Common Reasons for Claim Denial

Improper filing of claim

Waiter With WineIt is imperative that you understand your coverage and classify your claims in a way to ensure your loss will be approved and paid. To be safe, always call your agent before filing a claim or contacting any people involved in the case.

Our expert insurance agents will work with you to understand the details of the incident and guide you in how to appropriately file a claim.

Unknown exclusions

Here are some common policy exclusions that frequently catch business owners off guard and end up being unpaid claims.

  • Assault and Battery: If you have a doorman, live entertainment, or a dance floor, 90% of all general liability policies exclude assault and battery. This means that any altercation that occurs in your establishment would not be covered.
  • Hired Non-Owned: If you send anyone (paid employee, unpaid intern, contract worker, non-employee, etc.) to run an errand in their own vehicle and they get into an accident, your business is liable and you would have no coverage under your general liability policy.
  • Wind Storm: 54% of the policies we have evaluated over the last 3 years excluded wind storm coverage, unbeknownst to the policy holder.
  • Theft: Theft is always excluded unless you have an operational central station alarm.
  • Crime Coverage: This is another common exclusion. This coverage is necessary in the hospitality industry due to high cash volume onsite.

Incorrect filing by adjuster

Virtually all commercial insurers use independent insurance adjusters today. This increases the chances that a claim will not be explained properly to the insurance company, which could lead to your claim being denied.

Our agency will meet the adjuster at your location and go through the entire process with them to ensure your claim is filed correctly.

Lack of Liquor Liability Coverage

A common misconception is that a general liability policy covers any liquor-related claims. From the moment a customer begins drinking alcohol at your establishment, any property damage or injuries that person causes while there (and possibly even after he or she leaves your establishment) would be excluded from a general liability claim.

This is why you need liquor liability coverage, which protects you against claims filed against you as a result of the actions or behavior of an intoxicated person. Examples of claims that may be covered by a liquor liability policy include (but are not limited to):

  • A restaurant owner being sued by the family of a person killed by a drunk driver who had been drinking at the restaurant.
  • A resort owner being sued by a customer who was injured by a drunk patron in one of the resort’s lounges.
  • A liquor store being sued by the parents of a minor who hurts himself skateboarding after consuming alcohol the liquor store clerk sold to the minor.
  • A sports bar owner being sued by a patron who was punched in the face by an intoxicated sports fan over a comment about a sports team.

The last example (sports bar) highlights an important issue: Some liquor liability policies exclude assault and battery. This is why it’s so important to carefully choose a policy, taking into account all of the details in the fine print.

Consult the Experts at Tabak Insurance Agency

If you’re asking yourself “how does filing an insurance claim work?” and wondering what kind of coverage you need, don’t play guessing games—consult the experts at Tabak. Our experienced professionals understand the intricacies of insurance policies, and we’re experts at analyzing the particular risks of a business to determine which coverages a business owner needs.

Our professional agents are standing by to find you the most comprehensive policy at the lowest price—get a quote today.