In most cases, filing claims and getting reimbursed is fairly straightforward:

1. An incident occurs resulting in damage, loss, or potential liability.
2. You report it.
3. An adjuster or other authorized insurance representative investigates the matter.
4. Reimbursement is granted.

It would be ideal if it always worked this way seamlessly. Unfortunately, delays or problems in this process aren't that uncommon. The challenge is that the claims process, which is the most important aspect of a policy for most businesses, is hidden until it is essentially too late to rectify.

Reimbursement Problems

Obviously, insurers need to make sure they reimburse only the appropriate amount for legitimate claims. An unfortunate result of this that sometimes you may receive less than what you expect, or be denied altogether for a claim.

Claims problems typically have the same root: the insured business forgets or is unaware of particular provisions in a policy that limit the size of the settlement they are entitled to. This can be a result of policy sublimits, or coinsurance penalties applied after a claim is filed. Businesses certainly have the right to contest under-reimbursed claims.

Other problems arise when a company denies coverage on your claim. In this situation, you will need to re-present your case to the insurer.

Who can help?

Your broker.For contesting under-reimbursed claims, it can help tremendously for your broker (or another direct contact) to champion your cause through the appropriate channels.

Established organizations.To get a handle on other avenues to pursue, turn to your state insurance commission. Or try the Insurance Information Institute, which has a group of insurance specialists who can provide help. They can be reached at the National Consumer Helpline of I.I.I. at 800/942-4242.

Processing claims

Since the adjuster is primarily responsible for determining the fate of your claim, it pays to make his or her job easy.

Present your claim as convincingly as you can, offering supporting data whenever possible, (especially on higher-cost items). Also, since adjusters are usually handling dozens of other claims on top of yours, be pleasant and straightforward in your dealings.

Also, keep good records to make sure your claims will be speedily processed. Keep duplicate records of key purchases and income statements offsite, for example. For an easy record of your property, videotape it--this can help verify your property or business interruption claim.

In the case of major property loss, you may want to consider bringing in a public adjuster. Working independently, public adjusters help compile information for filing and act as a liaison to the insurance company. Public adjusters can often obtain reimbursements that far exceed their percentage fee--up to 14% of the claim.

Liability claims can be more difficult to process because they can be filed months or years after the incident in question. As a result, insurers are very interested in making sure that potential claims are investigated as soon as possible.

Claims history and premiums

Your premiums will be affected by your claims history--not only the claims that are paid out, but also any potential claims that may be filed.

Frequent claims
In general, insurers will view a company with frequent claims as a higher risk than a company with infrequent, though large, claims. Therefore, it may make sense to establish a policy where your company authorizes the payment of small claims.

From the insurer's perspective, it is worth settling these small claims immediately rather than engage in a protracted dispute. Also, you may want to keep track of these claims in order to see how you can reduce their frequency.

Future claims
Another component of your claims history are unresolved and potential claims. Money is set aside in what is known as case reserves,in the event they need to be compensated. As time passes, you should make sure the appropriate adjustments are made to these reserves. If you believe there may be too much is being withheld, you may want to negotiate for lower reserves.

Watch your records
Because it is so important to maintain a good claims history, have your loss records sent to you regularly so you can check what sorts of claims reserves you have from year to year. You should also check for errors in your loss records as you would a bank statement.