Policyholder Resources for Commercial Property Insurance Claims​

 

Regardless of the cause or severity of damage to your business, we're here to help. We'll work to resolve your businesss's claim quickly and fairly and keep you informed throughout the process.

Commercial Property Claim Frequently Asked Questions

We’ve gathered the following information to address frequently asked questions you may have about your commercial property claim. If you have any additional questions, please contact your claims representative.

​Property Claims Process

​What should I do immediately after a loss?
​Staying safe is the most important priority. If your property has major structural damage or if there are any doubts about safety, call local authorities before entering.

Take reasonable precautions to protect your property from further damage. If possible (and safe to do so), take photos of the damage. Keep any receipts from purchases or services used because of the loss. Your claims representative may request these for reimbursement purposes. 
​How should I report my property claim?
​Call us at 1-800-362-0000 to report your claim and have your policy number available which can be found on your policy declarations page. We’ll ask for details of the damage to your business or property.

It is important to report your claim as soon possible so that we may resolve your claim quickly.
​What should I expect from the claims process?
We will contact you to discuss the claim process, evaluate your coverage, and assess the damage. We also may ask you to submit any relevant documents or photos you may have to help us process your claim. While the amount of time it takes to process a claim varies, our goal is to resolve yours as quickly and professionally as possible.
​What happens if the damage affects my business operation?
We recommend you discuss this and any contingency plans with your claims representative. Our goal is to help you get back to normal as quickly as possible.
How do you determine damages?
​Depending on the claim type and damage, your claims representative may need to schedule a time to inspect the building and assess the damage.

If your personal property has been damaged, we will work with you to complete an inventory of the damaged items and create an estimate for the replacement cost value or actual cash value, depending on the details in your policy. If you need to discard damaged property prior to an inspection, please photograph and document the details of the item to show to your claims representative.

Once we have received all of the necessary information, your claims representative will work closely with you to resolve your claim as quickly as possible.
​What is the difference between replacement cost and actual cash value?
​There are two primary ways to value your property assets if they are damaged, stolen or destroyed:
  • Replacement cost value: What you would pay for the item at today’s cost. So, if your laptop is stolen, your coverage will reimburse you the full cost to buy a new, similar model — even if it is three years old.
  • Actual cash value: What you would pay for a similar item at today’s cost (its replacement cost) minus depreciation — or what you would get for your property if you sold it.
​What is depreciation and recoverable depreciation?
  • ​Depreciation: The decrease in value of an asset over time due to wear and tear, becoming outdated or obsolete, or nearing the end of its life span.
  • Recoverable depreciation: The monetary difference between your item’s replacement cost and the actual cash value. 
​How do I know if I have replacement cost coverage?
While some exceptions may apply, most insurance policies include replacement cost coverage. Please contact a claims professional with any questions regarding your policy.
​How does the claims payment process work?
​The claims payment process will depend on if your policy includes actual cost value or replacement cost value coverage.

If you have actual cost value coverage, you will receive a single claims payment for your damaged property.  However, if you have replacement cost value coverage, you will first receive reimbursement for the damaged property’s actual cost value.  You can also receive a payment for the property’s recoverable depreciation, which is the monetary value above the actual replacement cost to replace or repair the damaged property. To receive a claims payment for the recoverable depreciation, you must notify us and show proof of the completed repair or purchase to replace the damaged property.
​When should I notify you of my intention to seek reimbursement for money spent to repair or replace my damaged property?
Most insurance policies require that you notify your claims professional of your intention to make a claim for recoverable depreciation within 180 days after the loss or damage.
​What are the steps I should take to request reimbursement for the difference between the replacement/repair costs and the pre-damage value of my property?
  1. ​Notify your claims professional of your intent to pursue the recoverable depreciation portion of your claim.
  2. Repair or replace the damaged property
  3. Keep all receipts, invoices, purchase orders, etc., and present them to your claims professional
​What if I decide not to repair or replace some of my damaged items?
We will provide you with the actual cash value payment to satisfy your claim.
​What is subrogation?
​If a third party causes damage to your property, Liberty Mutual may seek reimbursement from the individual or company responsible for the loss. This process is known as subrogation.

When a subrogation claim is successful, you will be reimbursed part or all of your deductible. However, damaged items and broken pieces of equipment are very important when pursuing a subrogation claim. If possible, please do not discard these items in order to help us move forward with the subrogation process.

Understanding Business Income Coverage 

​What is business income coverage?
If your business sustains property damage from a covered loss (such as fire) and is unable to operate, business income coverage helps pay expenses and replace lost income while your operations are suspended.
​How will I know if my policy provides business income coverage?
Review the Declarations page or the Additional Coverage or Extension Endorsement(s) attached to your policy to determine if your policy provides business income coverage.
​Is business income coverage subject to a deductible?
Business income coverage may be subject to either a waiting period of 24 to 72 hours or a monetary deductible. Review your policy for more details.
​How will my loss be determined?
Your claims representative will work closely with you to assess the damage to determine any business income loss.
​What information will I need to provide?
​Some of the typical information requested by a claims representative include:
  • Profit and Loss statement(s)
  • Tax returns
  • Proof of payroll
  • Sales records
  • Tax Identification Number or Employer Identification Number
  • Dates and times business was non-operational

Insurance Glossary

​Actual Cash Value
The current market value of lost or damaged property at the time of a covered loss. For example, the value of a three-year-old car is based on the value of similar three-year-old cars selling on a used car lot. In a home insurance policy, actual cash value is the replacement cost of the property, less depreciation.
​Appraisal
An evaluation by a claims representative or appraiser to estimate the amount of damage to your property or vehicle, and the cost to repair the property or vehicle. In the worst-case scenario, a determination of a complete loss may be made.
​Claim
A request for payment or repair under an insurance contract due to a covered loss or accident.
​Conditions
Provisions that set forth the rights, duties, and responsibilities of the parties to an insurance contract.
​Deductible
The amount of a claim that you agreed to pay at the time you purchased insurance. This amount is deducted from a claims payment.
​Endorsement
Attached to your policy to modify the terms of the insurance contract. It can amend your policy to cover unique items or circumstances and it can also represent a change to a policy that’s made during the policy's term.
​Insurance to Value
The amount of coverage provided by your policy compared with the replacement value of the property.
​Limit of Liability
The maximum amount for covered losses available under your policy.
​Loss of Use
Compensation for losses you incur due to the inability to use your property or vehicle.
​Property Insurance
Part of home, condominium or renters insurance covering physical loss or damage.
​Replacement Cost
Coverage for the cost of replacing your car or property with new materials or materials of like kind and quality in the event of a covered loss.
​Scheduled Property
Listing specific personal property for a stated policyholder value. This is usually considered for valuable items that are subject to limited coverage.
​Subrogation
When money is paid for a loss caused by another person, the insurance company has the right to recover that money from the party that was legally at fault for the loss. The appropriate percentage of any deductible is repaid based on the amount recovered.

 

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​What is Subrogation?

​Learn more about what subrogation is and how it works. 

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