Quick answer
An insurance payout bridge lends against property or trading strength so a business can repair, restock and pay staff while its claim is assessed. The expected payout is the exit. Lenders want the policy, the claim number, the assessor's correspondence and a realistic view of what will be paid, and they allow for the fact that assessment can take months and the amount can change.
Key points
- The lodged claim is the exit, but its amount and timing aren't guaranteed
- Excesses, exclusions and under-insurance reduce what's actually paid
- Insurers generally aim to decide claims within four months under the industry code
- Property security gives the bridge headroom if the claim comes in lower
- Exit
- Insurance claim payment
- Evidence
- Policy, claim number, assessor reports
- Usual uses
- Repairs, stock, wages, temporary premises
- Unsecured options
- Typically $5k – $500k
A fire in the workshop. A storm that takes the roof off. Floodwater through the shop. A break-in that clears out the stock. You’re insured, you lodged the claim straight away, and the assessor has been. But the invoices for the builder, the replacement equipment and next fortnight’s wages are due now, and the insurer hasn’t paid.
That’s a classic bridging gap. Event A is the loss and the costs that follow it. Event B is the claim payment. In between, the business needs to keep trading, or at least keep its people and customers, so that there’s still a business when the money arrives.
Why is there a gap at all?
Insurance claims for businesses take time for sound reasons. The insurer needs to confirm what happened, what’s covered, what the loss is worth and whether any exclusions apply. Larger claims often involve loss adjusters, builders’ quotes, forensic accountants for business interruption, and sometimes disputes over scope.
Moneysmart summarises the General Insurance Code of Practice timeframes: a response within 10 business days of a claim, progress updates at least every 20 business days, and, except in some circumstances, a decision within four months of receiving the claim. That’s a decision, not necessarily the last payment. For a business with fixed costs, four months is a long time to carry them.
Our guide on how long business interruption claims take explains the process step by step.
How does a lender view an insurance claim as an exit?
Positively, when it’s well documented, and cautiously, because the amount isn’t settled until the insurer says so. Expect questions about:
- The policy: what’s covered, the sums insured, the excess, and whether business interruption cover is included.
- The claim: date lodged, claim number, what’s been claimed, and any items the insurer has queried.
- Assessment progress: loss adjuster reports, builders’ quotes the insurer has accepted, any partial payments already made.
- What you expect to receive after the excess, depreciation or under-insurance adjustments.
- The security: property with equity, or for smaller amounts, the business’s trading history and bank statements.
The prudent approach is to size the bridge against the amount you’re confident of, not the headline claim. The bridging calculator lets you test a lower payout to see what happens to your end debt.
What can a claim bridge pay for?
Anything the business genuinely needs to get through the claim period:
- Emergency repairs and make-safe work
- Replacement stock and equipment so you can trade
- Wages, so you keep trained staff
- Temporary premises or hire costs
- Supplier accounts, to stay on terms
- Tax obligations that fall due in the meantime
If the claim will eventually reimburse some of these, keep every invoice together. It helps the claim and it strengthens the exit.
Already have a claim number and an assessor’s report? See how a claim bridge could work for you in a minute.
Secured or unsecured?
If you own property with equity, a secured bridge from $20k up to $5m can cover larger repair and rebuild gaps, with room for the claim to take longer than expected. If you don’t, and the business was trading well before the loss, an unsecured cash-flow bridge typically between $5k and $500k may suit smaller gaps. It’s sized on turnover and bank statements, so a loss event that interrupts trading can make it harder. Property security is often the more reliable route after a major loss.
An illustrative example
A mechanical workshop in north Queensland loses part of its roof and two hoists in a storm. The claim, lodged the next day, covers the building, equipment and three months of business interruption. The insurer’s assessor visits within a week, but the builder’s scope needs the insurer’s sign-off before work starts, and the business interruption claim needs accounts prepared.
The owner owns their home and the workshop freehold. A bridge secured over the workshop funds the make-safe work, a temporary hoist hire and wages. The owner sizes it at about 70% of the claim estimate, not the full figure, and takes a six-month term. As the insurer pays each stage, the bridge is reduced. (Illustrative scenario.)
What if the insurer delays or disputes the claim?
Keep a dated record of every contact. If you’re unhappy with how a claim is handled, raise a complaint with the insurer, and if it isn’t resolved, small businesses can take insurance complaints to the Australian Financial Complaints Authority. If a declared disaster caused the loss, check Disaster Assist and business.gov.au for grants and concessional loans; these can reduce how much bridging you need. For the exit side, see bridging against money you’re owed.
How can you keep a claim moving?
Some delays are out of your hands, but many can be shortened:
- Lodge promptly and keep the claim number on every piece of correspondence.
- Photograph and document damage before and during clean-up.
- Keep every invoice for emergency work, hire and replacement stock.
- Get quotes quickly when the insurer asks for them.
- Respond to information requests the same week.
- Keep a log of every call and email with the insurer and assessor.
A tidy claim is easier to assess, and it’s also stronger evidence for your bridge.
Keep the doors open while the claim is worked through
The claim will be paid on the insurer’s timetable. Your costs run on yours. Tell us what happened, what the claim covers, where it’s up to and what security is available. It’s a 60-second enquiry with no credit check when you first enquire, and your information stays with us rather than being sprayed across a list of lenders. A specialist who deals with claim gaps reads it and calls you.
Please include the claim estimate and any amounts already paid as accurately as you can. It lets us size the bridge properly from the start.
Frequently asked questions
Can I borrow against an insurance claim that hasn't been paid?
The claim itself usually isn't the security. The loan is secured over property, or for smaller amounts assessed on trading, with the expected claim payment as the exit. The stronger the paperwork around the claim, the more weight it carries.
How long do insurers take to decide a claim?
Under the General Insurance Code of Practice, as summarised by Moneysmart, insurers respond to a claim within 10 business days, give progress updates at least every 20 business days and, except in some circumstances, decide within four months of receiving it. Payment then follows the decision.
What if the insurer pays less than I claimed?
Then more of the bridge needs another exit. That's why lenders prefer headroom and a realistic estimate rather than the full claim figure. Build in the excess and any items the assessor has queried.
Can I use the money for wages and rent, not just repairs?
Yes, for business purposes. Keeping staff and customers through a claim period is often what protects the business's value, and some policies include business interruption cover that later reimburses those costs.
Should I wait for government disaster help instead?
Check what's available first. After declared disasters, grants and concessional loans may be offered through business.gov.au and disasterassist.gov.au. A bridge can sit alongside those if the timing of either doesn't match your costs.