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Cedrick Forrest Jan. 24, 2023

5 Reasons Your Commercial Insurance Claim Was Denied

Having your business and property destroyed or damaged by a fire, water damage, or disaster can be a traumatic experience. It can become even more traumatic if your insurance company denies your damage claim and refuses to issue payment to repair or replace your property.

Why would an insurance company deny a claim?

Your claim can usually only be denied if the cause of damage is not covered by the policy or if you don’t live up to your contractual obligations (What to Do if your Homeowners Insurance Claim is Denied).

Here are 5 reasons your property damage insurance claim may have been denied.

Reason 1: Failure to File Your Claim Within the Limitations Period

In Texas, a property owner has 2 years to file a claim for property damage. If you have timely filed a claim and your carrier denied it, the limitations period begins when the insurance company closes your claim file.

You should mark your calendar for the 2nd anniversary of your claim denial. You don’t want to lose your right to sue because you missed a deadline.

If there is a storm that causes roof damage and you fail to file your claim within 2 years of the date of the storm, your claim will be denied. Hiring a property damage insurance attorney to manage your claim will help you avoid missing deadlines and losing money.

Reason 2: Failure to Pay Premium

Your insurance company requires you to pay your premium on time to receive coverage. After a missed payment, your coverage will expire if you fail to pay your premium by the reinstatement date.

If your insurance company cancels your policy without notifying you in writing, an experienced property insurance attorney can help you dispute the decision.

Reason 3: Failure to Properly Maintain the Property and Mitigate Damage

If you see stained ceiling tiles or walls, or smell odors caused by sitting water, this may be indicative of hidden leaks in a commercial building. As the policyholder, it is your responsibility to take measures to protect the property from further damage.

While a sudden release of water is usually a covered cause of loss under your property insurance policy, failure to quickly mitigate the damage may have caused the denial of your claim.

Reason 4: Failure to Submit a Sworn Proof of Loss

Insurance companies may require a Sworn Proof of Loss to be completed before paying a claim. If one is requested then you must fill it out, sign it, and have it notarized.

The Proof of Loss is your detailed statement of the items that were destroyed or damaged, the details surrounding the claim event, and the value of the items damaged during the claim event. If you fail to complete the Proof of Loss upon request, your claim could be denied.

Reason 5: Failure to Submit to an Examination Under Oath (EUO)

The events that lead to your property damage are not always clear. Insurance adjusters may request to take your recorded statement before they can determine coverage.

A EUO is quite common in instances of theft and arson. Insurance investigators are hired by the carrier when there are possible instances of fraud.

If you fail to submit to the examination, the carrier can deny your insurance claim

Consumer rights for commercial property insurance

Hire a professional property insurance attorney at The Cedrick D. Forrest Law Firm to help you dispute your insurance claim denial.

Although insurance companies are smart and tough, you have rights! Our expert attorneys are ready to review your policy, claim, and documentation, and negotiate with your insurance company to recover compensation.


You have suffered enough. Submit your FREE insurance policy review with ease, knowing that your property insurance attorney will fight for you with no upfront expenses.

If your property damage claim has been underpaid, delayed, or denied, fill out our form or call us toll-free today to begin your FREE case review.


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