According to Teh Yau Kun, Chief Claims Officer at Berjaya Sompo Insurance Berhad (Berjaya Sompo), much of that anxiety stems from misunderstanding how insurance works — and what actually affects the outcome of a claim.
“One of the most common misconceptions among business owners is that insurance companies always find ways not to pay,” Teh explained. “Some believe insurers intentionally delay claims by repeatedly asking for documents or that settlements are based on arbitrary percentages. This misunderstanding often leads to the temptation to inflate claims, which only complicates things further.”
The Root of Misconceptions
That perception — that “insurance companies always find ways not to pay” — is deeply ingrained in public sentiment. Teh believes it often comes from second-hand stories rather than firsthand experience.
“Many of these stories come from peers or family members whose claims were denied, but without the full context,” he said. “Most people don’t fully understand their policy terms, exclusions, or what actually led to the rejection.”
He emphasised that clarity and communication can make all the difference. To improve claim outcomes, businesses should focus on three key practices:
- Understand the policy – Review coverage regularly, especially conditions, warranties, and exclusions. Engage with intermediaries such as agents or brokers to clarify uncertainties.
- Maintain documentation – Keep proper records such as purchase invoices, photographs, or videos of insured property, and store digital backups.
- Be transparent—provide honest, timely disclosures throughout the claims process to ensure a fair and efficient assessment.
“Transparency builds trust,” Teh added. “When all information is presented clearly from the start, the process moves much more smoothly.”
The Hidden Risk of Underinsurance
While most MSMEs understand the importance of insurance, many underestimate the consequences of underinsurance — when the sum insured doesn’t reflect the actual value of their assets.
“Underinsurance often happens because business owners forget to review their coverage or deliberately declare a lower sum insured to save on premiums,” Teh shared.
When a loss occurs, insurers apply the principle of average — meaning the payout is proportionate to the declared value. The formula is:
Sum Insured ÷ Actual Value × Loss = Compensated Amount
“If your factory is insured for RM6 million but is actually worth RM10 million, you’ll only receive 60% of your claim,” he illustrated.
Teh recalled a real case involving a factory rented to multiple tenants. After a fire destroyed the building, it was discovered that the insurance only covered 60% of the reconstruction cost.
“The owner had to bear the remaining 40%. On a RM10 million reconstruction, that’s RM4 million out of pocket,” he said.
His advice is simple: view premiums as risk protection, not an expense. Regular reviews ensure the sum insured reflects the true replacement value of assets, protecting businesses from unnecessary shocks. “Reviews should be done when there is a significant change in risks, not just during annual policy renewal, to ensure that the business is adequately insured,” he added.
Business Interruption, The Often-Missed Coverage
Even among insured businesses, Teh pointed out a recurring oversight — the absence of Business Interruption (BI) coverage.
“Many businesses focus on insuring physical assets but forget about the income loss that follows,” he said. “Without BI coverage, when a fire halts production, the loss of profit can cripple operations — especially for those with tight cash flow.”
Why Claims Get Delayed or Rejected
Not all claims are denied due to policy exclusions. In many cases, the problem lies in missing records or poor communication.
“Some business owners fail to maintain proper documentation,” Teh said. “When records are incomplete or inconsistent, it delays the assessment process.”
Others avoid engaging with loss adjusters, assuming the process will resolve itself. Worse still, a small minority may attempt to falsify documents to support their claim — a serious mistake that can lead to full rejection.
Teh offered practical guidance to prevent these pitfalls:
- Keep organised and accurate records at all times.
- Notify your insurer immediately after any loss.
- Engage openly with the appointed loss adjuster and provide truthful details.
- If certain documents are unavailable, communicate early to find acceptable alternatives.
The Berjaya Sompo Claims Experience – Transparent, Measured, and Monitored
Berjaya Sompo has made transparency a central pillar of its claims philosophy.
“We’ve published our Claims Service Charter on our website, from acknowledgement to final payment,” Teh said. “It’s our public commitment to deliver efficient and transparent service.”
The company monitors compliance with its charter monthly, and Teh shared that Berjaya Sompo currently achieves a 92% compliance rate across its four key service pillars — insurance made accessible; knowing our customers; timely, transparent and efficient service; and fair, timely and transparent claims settlement process.
To further enhance transparency, Berjaya Sompo has outlined the end-to-end claims process online, including turnaround times for each stage. Policyholders can track their claim status in real time via multiple platforms — the corporate website, the MySompo mobile app, and agent portals.
“Whether it’s a claim or a policy renewal, we want customers to know exactly what’s happening and when,” Teh assured.
The Value of Specialised Agents
When disaster strikes, the first few hours are critical. Yet, many business owners are unsure what to do.
“Some panic and overlook getting advice from their agents,” Teh said. “Others start cleaning up before an assessment, not realising it can affect their claim.”
This is where a specialised agent proves invaluable. Acting as a bridge between client and insurer, agents help ensure every step — from documentation to communication — is properly handled.
“A knowledgeable agent interprets the policy correctly, helps prepare documents, and ensures clear communication between all parties,” Teh said. “Having that guidance means business owners aren’t facing the claims process alone. So call your agent immediately,” Teh emphasised.
Risk Management Begins Before a Claim
Ultimately, Teh advocated, insurance is part of a larger risk management strategy. Simple actions such as setting up smoking zones and maintaining fire extinguishers can prevent major losses.
He concluded with a reminder that reflects Berjaya Sompo’s ethos: “Insurance is not an expense—it’s an investment in resilience. Review your policy annually. Keep your records in order. Work closely with your agent. And know that if something goes wrong, We Are Here WITH You.”
