# Insurance Claims Process for Unpaid Invoices: Step‑by‑Step Guide

Trade‑credit or accounts‑receivable insurance is a safety net, but you only get the payout if you follow the **claims process** to the letter. This guide walks Indian SMEs through every stage—from spotting a default to receiving funds—so an unpaid invoice never turns into a balance‑sheet crisis.

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## 1  Know When You Can Claim

| Claim Trigger | Typical Waiting Period\* | Example |
| --- | --- | --- |
| **Protracted Default** (buyer just won’t pay) | 60–90 days past due | Domestic buyer silent after reminders |
| **Insolvency / Bankruptcy** | Immediate upon court filing | Buyer files under IBC, Chapter 11, etc. |
| **Political Event (exports)** | As defined in policy | FX controls, import embargo |

\*Check your policy wording—waiting periods vary by insurer and buyer country.

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## 2  Pre‑Claim Checklist

1. Confirm invoice is **overdue past waiting period**.
    
2. Send **final demand notice** (registered post/email) and log it.
    
3. **Freeze further shipments** to the buyer.
    
4. Gather documents (see next section).
    
5. Notify insurer via portal or email—many insist on notice within **30 days** of trigger.
    

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## 3  Document Pack You’ll Need

*Copy everything in PDF under 2 MB each.*

* Invoice & Purchase Order
    
* Delivery proof (signed challan, POD, BL, AWB)
    
* Statement of Account (showing outstanding amount)
    
* Reminder & demand letters/emails
    
* Buyer communication trail (WhatsApp, email threads)
    
* Insolvency filing copy (if applicable)
    
* GST returns / e‑invoice JSON (for domestic claims)
    
* Bank details for indemnity payment
    
* KYC docs (PAN, cancelled cheque) if first claim
    

Keep a cloud folder—insurers often request re‑uploads.

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## 4  Claims Filing: Step‑by‑Step

| Step | What to Do | Timeline |
| --- | --- | --- |
| 1 | Login to insurer or **PayAssured** claims portal | Day 0 |
| 2 | Fill claim form: buyer, invoice, trigger date, amount | 15 min |
| 3 | Upload document pack | Day 0 |
| 4 | Insurer acknowledges claim & gives reference number | Day 1–2 |
| 5 | Loss assessor review; may ask queries | Day 5–15 |
| 6 | Provide clarifications/additional docs if requested | Within 7 days |
| 7 | Insurer issues **Preliminary Loss Advice (PLA)** | Day 15–30 |
| 8 | After recovery efforts (subrogation), insurer pays indemnity (e.g., 90 % of invoice) to your bank | Day 30–60 |

Export claims involving political risk can take longer—up to 90 days.

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## 5  Recovery & Subrogation

* After payout, insurer pursues buyer for recovery.
    
* If they recover > deductible, they share net proceeds back with you per policy (often 50/50).
    
* Cooperate—supply any new info; lack of cooperation can claw back indemnity.
    

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## 6  Common Pitfalls to Avoid

* **Late notification**—miss 30‑day notice window, claim rejected.
    
* **Undeclared buyer**—selling above approved credit limit voids coverage.
    
* **Incomplete documentation**—missing delivery proof stalls claim.
    
* **Continuing shipments post‑trigger**—violates duty to mitigate loss.
    

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## 7  Tips for Faster Payouts

1. **Automate reminders**—PayAssured flags waiting‑period expiry and pre‑fills claim forms.
    
2. **Standardise file names**—Invoice‑123.pdf, SOA‑Feb2025.pdf; insurers love clarity.
    
3. **Maintain single point of contact**—claims move quicker when one person answers queries.
    
4. **Track claim status weekly**—nudge assessor politely if timeline slips.
    

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## 8  Key Takeaways

* File notice as soon as policy waiting period ends—don’t procrastinate.
    
* Provide complete, organised documentation to avoid back‑and‑forth.
    
* Cooperate with insurer’s recovery efforts; you may share in recoveries.
    
* Use automation tools like PayAssured to hit deadlines and pre‑populate claim data.
    

> **Remember:** Insurance pays only if procedure is followed—treat the claims process like a mission‑critical SOP.