Funding the gap while your insurance claim is assessed

A fire in the kitchen. Floodwater through the warehouse. A storm that takes the roof off the workshop. The policy is in place, the claim is lodged, and the insurer has appointed someone to assess it. Then the waiting starts.

Assessment takes time, and that time is when businesses lose the most: customers drift to competitors, staff find other jobs, contracts are handed to someone who can deliver. Insurance is designed to put you back where you were, eventually. A short loan secured on property can put you back sooner, with the payout repaying it when it arrives.

How long do insurance claims take to pay?

The General Insurance Code of Practice, published by the Insurance Council of Australia, sets the timeframes most insurers follow for retail insurance, which the Code defines to include products used in connection with a small business. The Code’s small business definition is fewer than 100 people for a manufacturer and fewer than 20 for other businesses.

Under the Code:

• Within 10 business days of receiving your claim, the insurer tells you what information it needs and gives an estimate of how long the process will take.
• Within 10 business days of finishing its enquiries, the insurer decides whether to accept or deny the claim and tells you.
• Within 4 months of receiving the claim, the decision is generally made.
• Up to 12 months in limited cases, including claims from an Extraordinary Catastrophe, suspected fraud, communication difficulties beyond the insurer’s control, or delays you request.

The Insurance Council says the current Code was last updated in October 2023, and a redrafted Code went to public consultation from June to July 2026, so check the latest version when you claim. Larger businesses outside the Code’s small business definition should read their policy and ask their broker about timing.

A decision is not the same as money in the bank. After a claim is accepted there can be scope agreements, builder quotes and progress payments. Plan the loan term around the whole process.

What can the funding pay for?

• Emergency make-safe and repairs to get trading again.
• Replacement stock and equipment, often needed before the insurer settles the contents part of the claim. See stock and inventory and equipment and machinery.
• Wages and super to keep a trained team together. See covering Payday Super and payroll.
• Temporary premises, relocation costs or hire equipment.
• The excess and any amount you expect the policy not to cover.
• Supplier accounts that fell behind during the shutdown. See supplier payments.

How it works

1. Lodge the claim and get a claim number. Business.gov.au advises contacting your insurer as soon as possible and checking your policy for any time limits.
2. Record everything. Photos of damage, stock lists, computer records. Business.gov.au says insurers may ask for these, and that you should keep all invoices for emergency repairs you arrange.
3. Talk to your broker about the likely payout. What’s covered, what’s excluded, the excess, and any business interruption cover.
4. Enquire. The property you’ll offer as security, what’s owing on it, the amount and the claim’s status.
5. Choose the security. A caveat loan for a quick, smaller bridge; a second mortgage for larger or longer claims; a private first mortgage over debt-free property.
6. Rebuild and reopen.
7. Repay from the payout and trading income, in one sum or as progress payments come in.

If the doors are shut and the clock is running, send an enquiry about bridging your claim and a specialist will look at it today.

How much of the claim should you borrow against?

A claim is not one number. It is usually several parts, each with a different level of certainty, and the loan should lean only on the solid parts.

• Building damage. Usually the clearest part of a claim once scope is agreed, but often paid in stages as work is done.
• Contents and stock. Depends on records. Good stock lists and invoices make this part far more certain.
• Business interruption. If you hold this cover, it may replace lost profit for a set period. The terms vary widely between policies, so ask your broker exactly what is covered and from when.
• The excess. Always yours to pay.
• Anything excluded or disputed. Treat it as zero until resolved.

A practical rule: add up the parts your broker is confident about, subtract the excess, and borrow against that figure with room to spare. If the remaining parts come through, they are a bonus that strengthens the exit, not the foundation it stands on.

Then look at trading income as the second leg. Once you reopen, revenue starts to rebuild, and that income can carry part of the repayment if the insurer is slow or trims the payout.

Waiting, borrowing or doing both?

Option	When it works	Risk
Wait for the insurer, stay closed	Short assessment, loyal customers, minor damage	Lost customers, staff and contracts
Pay from business reserves	Strong cash position	Leaves the business exposed to the next shock
Ask the insurer for an interim or progress payment	Insurer agrees and the claim is clear	Not guaranteed; depends on the insurer
Government disaster assistance	A declared disaster and eligibility	Limited amounts, eligibility rules, timing
Unsecured business loan	Small amounts, quick	Frequent repayments while revenue is down
Property-secured bridge	Equity elsewhere, credible claim, need to reopen quickly	Property is at risk if the claim is reduced or denied

The broader comparison of secured and unsecured funding is at secured vs unsecured business loans.

Who it suits

• Hospitality venues after a kitchen fire or flood, where every week closed costs customers. See hospitality.
• Manufacturers and workshops with damaged plant and contracts to deliver. See manufacturing and industrial.
• Retailers who need replacement stock before peak season.
• North Queensland and coastal businesses hit by cyclones and storms, where catastrophe declarations can extend claims timelines.
• Owners whose bank won’t lend until the insurer settles.

When this isn’t the right move

• The claim is in doubt. If the insurer has signalled an exclusion, non-disclosure or underinsurance issue, the exit is uncertain. Resolve that first, or borrow only against what’s undisputed.
• The business wasn’t viable before the event. Insurance plus borrowed money won’t fix a business that was already failing.
• The insurer is about to pay. If the claim is accepted and payment is days away, a short wait may be cheaper.
• The damaged building is your only property. Lending against a damaged property is case by case, and may not be possible until repairs are under way.
• You’d need to borrow far more than the likely payout. That turns a bridge into long-term debt, which needs a different plan.

What it costs (without the guesswork)

Every claim bridge is different, so there’s no single price to publish. The property, the amount borrowed against it, the likely length of the claim and how certain the payout is all shape the price, which we set as competitively as the situation allows. The components:

• Interest, prepaid or capitalised, so you don’t fund monthly repayments while revenue is down.
• An assessment fee, which varies and appears on the Letter of Offer.
• Legal and registration costs for the security and its later release.

There’s no formal valuation required, which matters when you’re already waiting on a loss assessor. Security ranking behind a bank, such as a caveat or second mortgage, costs more than a first mortgage.

The fair comparison is the loan’s total dollar cost against the dollars lost by staying closed: lost margin, lost contracts, and staff you’ll need to rehire and retrain.

Documents you’ll need

• Identification for borrowers and any guarantor.
• The policy schedule, claim number and insurer correspondence.
• Photos, the loss adjuster’s report if you have one, and your list of damaged items.
• Quotes for repairs, replacement stock and equipment.
• The security property’s details and a statement for any loan on it.

How fast

With documents in hand, funding is possible within 24 to 48 hours for up to $5m, and amounts from $20k to $250k secured on property can be possible same day. In a disaster, title offices, solicitors and lenders may themselves be affected, so allow a little extra time. For deadline-driven situations generally, see urgent business loans.

Illustrative example: a cyclone-damaged workshop reopens early

Illustrative example: A Townsville marine engineering workshop loses its roof, stock and two machines in a cyclone. The claim is lodged, but a catastrophe has been declared and the insurer warns assessment may take months. The business has $180,000 of contracts that must be delivered within ten weeks. The owner holds an investment unit worth about $700,000 with $300,000 owing. At an illustrative 70% band on total debt, the unit supports about $490,000 in total, leaving headroom of about $190,000.

Claim bridge	Amount
Temporary roof and make-safe	$35,000
Hired machines for ten weeks	$28,000
Replacement stock	$45,000
Wages buffer	$40,000
Principal	$148,000
Interest, capitalised over 8 months	worked out per deal
Assessment fee and legals	worked out per deal
Inside the security?	yes, under the $190,000 illustrative headroom
Exit	Insurance payout, plus income from the $180,000 of contracts

The workshop reopens in three weeks under a temporary roof and delivers its contracts. The insurer accepts the claim at month five and pays in stages. The bridge is repaid at month six. For North Queensland notes on title and security, see our Townsville and Cairns page.

Protecting the claim while you rebuild

• Get approval before major work. Emergency repairs are one thing; a full rebuild without the insurer’s agreement can complicate the claim.
• Keep a single folder of invoices, quotes, photos and emails. You’ll need it for the insurer and for us.
• Separate the loan’s money. A dedicated account makes it easy to show what was spent on what.
• Escalate if needed. If you disagree with the insurer, raise a dispute with it, then with AFCA. Business.gov.au notes AFCA helps small businesses resolve complaints with financial firms.

If the insured event also hit your ability to pay the ATO or your bank, see refinance when the bank says no and paying an ATO debt with property equity.

See if you qualify and get trading again

When a fire or flood has closed the doors, you need a quick yes or a quick no. No credit check is run when you ask, and your details are not forwarded to a string of lenders. A specialist reviews the enquiry personally. Be accurate about the security property, what’s still owed on it and where the claim stands, and the first answer will be the one you can build on.

Ask whether your property can fund the rebuild, or read about secured business loans generally.