The Importance of Prompt Incident Reporting For Small Businesses

Businesses should take every incident that could result in a claim seriously, no matter how minor the event may seem. For example, if a patron slips and falls but appears unharmed, they could still file a claim several weeks later for injuries that may not have been immediately apparent. If a business failed to promptly report that incident, its insurer may not be positioned to provide optimal assistance.

Swift reporting of each incident before it results in a claim can save time and money, and can help ensure necessary actions are taken when capable of having the greatest impact. This blog provides more information on steps to take immediately following an incident, why insureds may be reluctant to report incidents and the benefits of prompt incident reporting.

Prompt incident reporting is an essential component of risk management and can offer businesses several benefits, including reduced costs and stress.

 Steps to Take Immediately After an Incident

Appropriate actions to take following an incident depend on if it is related to property damage or bodily injury. Although no two circumstances are exactly alike and many variables may influence the best course of action, the following provides a general overview of steps to take:

Property damage incidents—If an incident involves property damage, a business should generally follow these steps:

1. Take appropriate steps to reduce the chances of additional damage.
2. Contact the insurer and have the policy number ready. Discuss whether to proceed with filing a claim or an incident-only report.
3. File the claim or incident-only report.

Bodily Injury incidents— If an incident involves bodily injury, a business should generally follow these steps:

1. Offer assistance to injured individual(s) and call emergency responders or medical personnel if needed.
2. Collect contact information from injured individual(s) and witnesses and contemporaneously document their recollection of the incident. Take photos or videos of the area if permitted and appropriate and save the gathered information. Access security footage if available.
3. Take appropriate steps to reduce the chances of additional injuries.
4. Contact the insurer and have the policy number ready. Discuss whether to proceed with filing a claim or an incident-only report.
5. File the claim or incident-only report.

Why Insureds Are Reluctant to Report Incidents

There are many reasons insureds are reluctant to report incidents, even if doing so is in their best interests. For example, they may erroneously believe that claims will not materialize or that filing an incident-only report will lead to a claim that would have otherwise not been filed. Insureds may also falsely believe that reporting an incident will automatically result in an insurance payout that could lead to increased premiums.

Benefits of Promptly Reporting Incidents

Reporting incidents promptly can have many benefits. For instance, it may reduce the likelihood of the other party retaining counsel, which may allow for a swifter settlement. This shorter timeframe may lead to decreased costs and stress. Additionally, a business may receive reputational benefits by promptly reporting incidents, as doing so can demonstrate that it takes these matters seriously. 

Prompt reporting can also better position a business’s insurer to provide assistance and investigate the claim, as evidence and witness information are generally more readily available soon after the event. Additionally, prompt reporting may allow businesses to uphold the terms of their insurance policy, as many require swift reporting of occurrences that may give rise to a claim.

Businesses need to be aware of the benefits of promptly reporting incidents and how it can save time and money. For more small business insurance guidance, contact us today.