Common reasons business insurance companies might not pay a claim

Not having the right cover is one of the most common reasons why claims aren't paid. There's nothing more frustrating than making a claim, only to discover that you're not covered for that particular incident.

This is why it's so important to research exactly what cover you need and get the right level of cover. For instance, opting for £5 million of public liability cover instead of £2 million.

If you're unsure what cover you should consider for your business, our quote builder guides you through the most appropriate covers for the work you do.

If you still have questions, our customer success team are on hand to talk about your options via our web chat, email or by phone on 0333 772 0759+31 10 8080 889.

Most insurers have a claims process and for each insurer, the process will be different.

Depending on the claim, you might be asked to follow a certain procedure for your claim to be successful. This could include how long you have to make a claim, who to contact and proof of purchase.

At Superscript, we have an in-house claims team ready and waiting to support you through the process with individual insurers.

But before you make a claim, it can be helpful to understand what information your insurer will usually ask for. This can speed the process up and hopefully lead to a successful claim — which is why we wrote a handy guide to what information is needed to make a claim.

As well as a claims process, your policy will specify how you should act in the event of a claim. While the obvious go-to is to say sorry when something goes wrong, this could actually hinder your claim.

If you admit that you were at fault (for example, after an accident), before your insurer has had a chance to review the situation, you could be going against the terms of your insurance policy. Doing so could invalidate the claim, meaning the insurer might refuse to pay out.

When it comes to making a claim, timing is key. To understand whether the claim you're trying to make will be valid, you have to first understand whether your policy is based on "claims made" or "claims occurring".

With a claims made policy, the claim must be made and reported while your policy is active. Even if the incident happened earlier, you won’t be covered if the claim comes in after your policy ends.

That’s why it’s important to tell your insurer as soon as you’re aware of a potential issue, even if no formal claim has been made yet. Waiting could put your cover at risk.

A claims occurring policy works differently. As long as the incident happened while your policy was active, you can still make a claim after your cover has ended — even years later.

You can read more about the difference between the two in our guide to claims made insurance.

Omissions and inaccuracies are another big reason why claims aren't paid. This can happen if you haven't given the insurer all the necessary or correct details when taking out your policy.

For instance, if you’ve told us that you’re a building contractor, but you've not said that you also occasionally work as an electrician, we might not be able to process a claim if it relates to the electrical work you do.

This is why it’s important to answer all questions asked by your insurer as accurately as possible. At Superscript, we understand that the services you offer can change halfway through your policy. That’s why we offer fee-free policy adjustments if you need them.

That way, if you do start offering electrical work alongside your building work, you can add that cover to your existing policies, without fees.

While we'd like to cover everything, there are some things that are considered too high-risk to cover. These things are called exclusions.

Common exclusions include anything done on purpose to cause damage or loss, illegal activities, and claims involving asbestos or pollution.

Any exclusions in your policy should be clearly stated, so it's worth having a read and noting what they are so you can avoid getting caught out.

Just like not having the right level of cover, there are times when the thing you’re claiming for isn’t actually included in your policy.

Say you’re claiming for damage to an item, but it turns out to be general wear and tear — that’s usually not covered, so the claim might not be successful.

Accidents happen — but insurers will want to see what you’ve done to prevent them.

This usually comes under a "reasonable care" or "duty of care" clause in your policy. One way to stay on top of it is by having a risk management framework in place — a simple way to spot and reduce the risks that could affect your business.

When you make a claim, your insurer will probably ask for some evidence that relates to the incident. This could be a police report for stolen goods or photographic evidence of property damage.

If you haven't gathered the evidence they need or enough evidence to prove the claim, it might not be successful.

Each policy has geographical limits. This means you’ll be covered in certain areas or countries, but not others.

There may be some clauses in your policy that cover you for various locations, but if the incident happens outside of those areas (your geographical limits), you might not be covered.