Most business owners have never made a claim
Insurance is bought in anticipation of a situation most business owners never face. When it does happen — a fire, a flood, a theft, a liability claim, a cyber incident — they’re dealing with it for the first time under significant stress, often without preparation, and usually without a clear understanding of what the insurer expects.
The claims process is manageable. The first 24 hours matter more than most people realise — both for preserving evidence and for satisfying the notification conditions that policies typically require. Understanding what happens at each step reduces the likelihood of avoidable problems.
The first 24 hours: property and liability events
Secure and document
Do what’s reasonable to prevent further loss — board up broken windows, contain water damage, secure the premises. But do not remove or restore damaged property before it has been photographed and, where necessary, inspected by a loss assessor.
Timestamped photographs of all damage are among the most valuable evidence in a property claim. Courts and insurers resolve disputes about the extent and cause of damage based on contemporaneous evidence. Photos taken the day of a loss are worth more than a description provided three weeks later.
Notify promptly
Most policies include prompt notification as a condition of cover. “Prompt” is typically interpreted as within 24–48 hours for a property loss, or as soon as practicable for a liability event (where you may not know a claim is coming until you receive correspondence from a third party).
Delay in notification can create grounds for the insurer to complicate or reduce a claim, even if the delay didn’t affect their ability to investigate. Notify early, even if the full extent of the loss isn’t yet known.
The first 24 hours: cyber events
Cyber claims require different first-response actions from physical property claims. The most common mistake is restoring systems before forensic investigation.
In a ransomware or breach scenario, independent forensic investigation depends on the integrity of affected systems. Powering down, wiping, or restoring before investigation can undermine the claim, the regulatory response, and your ability to understand what happened and what data was accessed.
The first call in a cyber incident should be to your insurer — specifically to activate their incident response panel if the policy includes one. A policy with an integrated incident response team is worth significantly more than a reimbursement-only policy at this moment. The forensic team, legal counsel, and notification support are deployed through a coordinated process that the insurer manages.
What insurers assess
Insurers assess claims on two dimensions: coverage and quantum.
On coverage: Was the event within the policy period? Does it match a covered cause? Are there exclusions that apply? The coverage question is determined by the policy wording and the facts of the incident.
On quantum: Is the claimed amount supported by documentation? Is the methodology for calculating loss appropriate? Are there deductions — depreciation, policy excess, underinsurance provisions — that reduce the settlement?
Documentation gaps are the most common reason claims settle below their full value. For BI claims particularly, the revenue loss calculation needs to be supported by financial records — tax returns, management accounts, BAS statements — that the insurer can verify. A claim without supporting documentation is not automatically declined, but it will be examined more closely and may settle lower.
How an insurance adviser helps at claims time
An insurance adviser’s role doesn’t end at placement. Claims management is where the relationship earns its value — particularly for complex or large claims where the business and the insurer may have different views on what the policy covers.
A good adviser will review the claim against the policy wording, help compile documentation in the format insurers require, liaise directly with the loss assessor or loss adjuster, push back on initial assessments that undervalue the claim, and escalate where necessary.
Going through a claim without an adviser means navigating the process alone while the insurer is represented by experienced claims professionals. The imbalance in experience is significant.
If a claim is declined
A claim decline is not necessarily the final word. If you receive a decline:
- 01Request the decline in writing with the specific policy clause relied on. Verbal declines are not binding and don’t start the formal dispute clock.
- 02Review the stated basis against the policy wording. Insurers occasionally decline on grounds that don’t hold up to careful reading of the policy.
- 03If you believe the decline is wrong, the Australian Financial Complaints Authority (AFCA) provides free dispute resolution for insurance disputes. AFCA can overturn insurer decisions and is taken seriously by the industry.
- 04For significant claims, a legal opinion on the merits of a coverage dispute is worth the cost. Not every declined claim justifies litigation, but for large claims it’s a relevant option.