Who the adjuster works for, what a proof of loss is, why the first cheque is not the whole cheque, and what to do when the answer is no. The part of insurance you bought it for, and the part nobody reads about until they are in it.
From first report to final payment.
A commercial claim has a small number of moving parts: a report, an adjuster, a proof of loss, a valuation, and a payment. Most of the frustration people describe comes from not knowing which part they are in, who the person on the phone works for, or what is expected of them next. None of it is secret. Here is the whole sequence, and the two points in it where a claim most often goes wrong.
The first days matter more than the rest of it
Report the loss to your broker or your insurer as soon as you know about it. Not once you have the full picture, not once you have decided whether you want to claim: as soon as you know. Every property policy carries a duty to give notice in writing immediately, and late notice gives an insurer grounds to decline a claim that would otherwise have been paid. A court can sometimes forgive it, but that is a fight you do not want to need.
Then stop the damage getting worse. You have a duty to mitigate, which means taking reasonable steps: boarding up, tarping a roof, shutting off water, moving stock out of a wet area. That emergency work is expected of you and its cost is normally part of the claim, so keep every invoice.
What not to do is begin permanent repairs before the loss has been seen, or throw damaged property out. The damaged item is the evidence.
- Report it to your broker or insurer immediately, before you have the full picture.
- Stop the damage spreading, and keep every emergency invoice.
- Photograph and film everything before anything is moved or cleaned up, down to serial numbers.
- Keep the damaged property until the adjuster releases it.
- Start a file: dates, names, calls, and what was said on each one.
- If theft, vandalism or a vehicle is involved, report it to police and get the file number.
Who the adjuster works for
An adjuster investigates the loss, works out what the policy covers, and settles the amount. In Alberta, independent and public adjusters are licensed by the Alberta Insurance Council at one of three levels, the first two working under the supervision of a Level 3. An insurer's own staff adjusters are exempt from licensing. Who retains them is the part that matters to you.
A staff adjuster is an employee of your insurer. An independent adjuster works for an adjusting firm your insurer has hired, usually because of volume, distance, or the type of loss. Independent means independent of any one insurer, not independent of the one paying for this file. Both are working the claim for the insurer, and the insurer they act for owes you good faith in how the claim is handled, which is a real legal duty rather than a courtesy.
A public adjuster is the only one of the three you hire. They work for you, you pay them, and the fee is often a percentage of what you recover.
None of this makes an insurer's adjuster your opponent. Most claims are handled straightforwardly by people doing a technical job well. But you should know whose instructions the person across from you is following, because it explains why they ask what they ask.
The proof of loss, and why it is the document to slow down on
The proof of loss is the formal statement of your claim, and in Alberta it is a statutory condition of a property policy rather than an insurer preference. It is verified by statutory declaration, which means signing it in front of a commissioner for oaths or a notary, and it has to be delivered as soon as practicable after the loss.
What it must contain is set out: a complete inventory of the property showing quantities and costs, the particulars of the amount claimed, when and how the loss happened, and your interest in the property. On a commercial loss that is real work, and it is why building an inventory out of a shoebox of receipts always takes longer than anyone expects.
Take the time. A wilfully false statement in a proof of loss invalidates the claim of the person who made it, so a padded figure is not an aggressive opening position, it is a way to lose the entire claim. A proof of loss that undercounts because you were rushing costs you in the other direction, because it is the figure the insurer works from. Where you are unsure of a value, say so and give your basis rather than guessing.
Your broker should be helping you build it and should read it before you swear it. That is a normal part of the job, and you should not be doing it alone.
How the money arrives, and why the first cheque is not the whole cheque
On a replacement-cost policy the first payment is usually actual cash value: the cost to replace, less depreciation for age and wear. The rest, the depreciation holdback, is paid once you have repaired or replaced the property and can show it. That is not the insurer being difficult, it is what replacement cost means. The policy pays to put you back, not to hand you the value in cash.
Which has a practical consequence worth deciding deliberately rather than by drift: if you choose not to rebuild, you generally keep the actual cash value and not the full replacement cost.
Advances are normal on a large loss. If you need money now for emergency work, temporary premises or payroll, ask for one. Insurers routinely advance against a claim they expect to pay, and nobody offers if you do not raise it.
Business interruption runs on its own track and its own documents, usually an accountant's reconstruction of what you would have earned. Start it early. It takes longer than the property side, and it is the part that keeps the business alive while the property side is argued about.
When you disagree about the amount: appraisal
There is a formal process for this and most business owners have never heard of it. Where you and the insurer disagree about the value of the property, the extent of the repairs, or the amount of the loss, Alberta's Insurance Act provides a dispute resolution process, still widely called appraisal.
It works like this. Once your proof of loss is in, either side can start it with a written demand. Each side names a representative, the two representatives name an umpire, and a finding agreed by any two of the three settles the matter. Each side pays its own representative and the umpire's cost is shared. It is faster and far cheaper than a lawsuit, and it exists precisely because a valuation argument should not need a courtroom.
The limit to understand is that appraisal decides how much, not whether. If the disagreement is about whether the loss is covered at all, appraisal is the wrong tool and you are into the route below.
When the claim is denied
Start with the letter. A denial must give a reason, and the reason tells you what kind of problem you have. An exclusion is an argument about wording. A breached policy condition, an unoccupied building, a disabled alarm system, late notice, is an argument about facts. A valuation dispute is not really a denial at all and belongs in appraisal. Those go to completely different places, so read the letter properly before reacting to it.
Then use the insurer's own complaint process, because you will need it. Every insurer has an internal complaints officer, and their answer comes back to you as a final position letter. That letter is the ticket to the next stage: nobody outside will look at your file without it.
From there the General Insurance OmbudService reviews home, auto and business insurance complaints across Canada, free of charge. Know what it is and is not. It mediates and, if that fails, gives a recommendation that does not bind either side. It cannot order your insurer to pay, and it only handles complaints about insurers that are members of it. In Alberta the Superintendent of Insurance takes complaints about market conduct, and the Alberta Insurance Council handles the conduct of licensees.
And there is a time limit. A legal claim against an insurer has a limitation period, and it keeps running while you work through a complaint process unless you and the insurer agree in writing to suspend it. If the amount matters, get advice on timing early rather than after the ombudsman route is exhausted.
Should you hire a public adjuster?
Sometimes, yes. On a large, complex or contested loss, particularly one where the business is disrupted and nobody internally has the time to run the file, a public adjuster brings full-time attention and expertise in exactly this. Their fee is often a percentage of what you recover, so you are buying that attention out of the settlement.
Before signing anything, check the same things you would for any professional: that they hold an Alberta licence, what the fee percentage is and what it is calculated on, whether it applies to money the insurer had already offered before they were engaged, and how the engagement ends if you want out.
The honest caveat, from a broker: ask your broker first, and ask directly. Claims advocacy is part of what your commission already pays for. A broker who has been running your program should be able to challenge a valuation, escalate a stalled file, and argue a coverage position without a further percentage coming out of your settlement. If you cannot get that, the public adjuster question answers itself, but it is worth asking before giving away a share of the claim.
What your broker should be doing while this happens
Reporting the loss and confirming it was received. Telling you what your policy covers before the adjuster does. Explaining which coverage each part of the loss falls under, because one event often touches property, business interruption, extra expense and liability at once, and those carry separate deductibles and separate limits.
Then staying on it: chasing a file that has gone quiet, reading the proof of loss before you swear it, questioning a valuation that looks light, and telling you plainly when the insurer's position is the right one, because sometimes it is.
The week of the loss is not the moment to discover whether you have that.
The time to check is before the loss.
Most claim problems trace back to something set long before the loss: a limit nobody updated, a deductible nobody explained, business interruption that was never bought. Send us your policy and see if you’re covered for the risks that your business faces.