You might be tempted to handle a minor damage claim yourself, without bothering to file it with your insurance company. For one thing, paying up won’t cost you much. What’s more, you might feel that reporting too many claims could drive up your premiums — and even risk the cancellation, or non-renewal, of your policy.
However, before you dig into your pocket to pay that nickel-and-dime claim, bear in mind that your Commercial General Liability policy probably has language like this:
No insured will, except at that insured’s own cost, voluntarily make a payment, assume any obligation, or incur any expense, other than for first aid, without our consent.”
In other words, if anything goes wrong with this claim, don’t expect your policy to help. Let’s say a visitor to your worksite suffers a “minor” injury after stepping on a nail – and you agree to pick up the tab for them to go to the ER, without reporting the incident to the insurance company. A week later, the victim’s attorney lets you know that the wound has turned into a serious infection that will require a long and costly hospital stay. If you turn to the insurance company to pay the claim, you might well be out of luck — and thousands of dollars out of pocket! Even if the company does pay the claim, you’ve taken an unnecessary risk.
The solution: Inform your insurer about every claim, no matter how “minor” as soon as possible. This meets the terms of your policy. If you pay the loss yourself, well and good! If not, the company will step in — saving you the time, expense, and hassle of dealing with it.