When you, a business owner is involved in an accident, your natural reaction is to acknowledge the mistake and to apologize. It may happen to a valued client and you want to do what you need to in order to salvage the business relationship. In the event of litigation this may compromise your insurance company’s ability to negotiate a settlement or to defend the lawsuit.
It has happened where an insurance company has denied a liability claim because of the early admission of guilt on the grounds that conditions of the policy with respect to the conduct of claims were breached. This has been tested in the courts and has been upheld. The insurance company is within their rights to do this. However, we have also seen examples where upon the completion of the investigation by the insurance company, a cheque is promptly mailed out accepting the fact that the business owner was negligent and caused damages. As business owners we just have to be careful to not make any promises. The only promise you can safely make is that a claim will be opened with the insurance company. After that everyone will have to wait for the process. Never should an admission of guilt be made without the consent of the insurance company. You see, the business owner may not have been at fault but because he has admitted to it, he will likely be found guilty by a judge. In this case the compensation would likely have to come from the business owner not the insurance company.
Be sure to seek advice and purchase insurance from an insurance broker who understands your business!