Too often when a business insurance claim goes unpaid, the insurance agent gets fired by the insured. Sometimes an errors and omissions claim is made against the agency. Regardless of what comes down, the situation evokes fear, is time consuming and often expensive, and can irreparably damage relationships.

They say forewarned is forearmed. So we tracked down the most common reasons a business insurance claim is not paid.

15 Key Reasons Business Insurance Claims Go Unpaid


1. Underinsured property values (buildings, tenant improvements, contents, etc.)

2. Loss of income coverage either missing or an insufficient limit.

3. Insurance automatically renewed each year without being updated.

4. A location is either missing or listed incorrectly.

5. Inventory of others is not properly insured or not insured at all.

6. Coverage missing for "back-up of sewer or drains."

7. No coverage for extra costs due to "building ordinance or law" requirements.

8. Coinsurance penalties. Failure to include "agreed amount" protection and/or blanket limits.

9. Employee dishonesty and forgery are not adequately insured.

10. Coverage missing for "off premises power failure."


11. Named insureds incorrect or missing when a suit occurs.

12. Inadequate insurance limits.

13. Auto policy "named insured" does not match the vehicle registration.

14. Employment practices liability coverage (including third party and wage & hour protection) is either missing or inadequately insured.

15. Cyber liability exposures have not been properly insured.


Pollution coverage is missing because someone believed there was no environmental exposure and were wrong. Example: Milk is a pollutant if it ends up in a stream.

Have some thoughts about these 15 Key Reasons? Let us know here...