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Protecting Your Assets Avoiding Day-to-Day Liability Risks Insurance: The Protection of Last Resort Understanding Insurance Coverage Give Prompt Verbal and Written Notice of a Claim
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Selecting the types and levels of insurance is vitally important to a small business owner seeking to avoid day-to-day liability risks. So an owner should follow some general insurance guidelines if he or she wants to take full advantage of the protections purchased.
Generally, all insurance policies have a clause that requires the insured to give prompt notice of a claim. This is best done immediately by way of a telephone call, which is always followed by written notice in the form of a letter.
This telephone call and letter should be recorded in a log. The date, time and name of the other party should be recorded when any verbal communication occurs.
Policies may contain very specific requirements for giving notice. For example, if a summons and complaint were received, the insured will usually be required to forward a copy to the insurance company. Failure to follow these exact requirements may result in the notice being deemed defective.
Where notice is not given or is defective, the insurance company may deny the claim. However, in all states except a few (see below for the specific states), for the insurance company to legally deny the claim, it must be able to prove that it was prejudiced by the failure to give adequate notice.
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