By Jeff Johnston, CPA/ABV/CFF, JD, LLM
Organizations that experience disaster—such as a fire, explosion, storm damage, flood or recall—will almost certainly face sustained damage and, needless to say, crippling losses. Although property may be destroyed and operations may cease, the organization’s expenses rarely cease. At the very least, there are employees to pay and recovery efforts to fund. Filing a timely, accurate insurance claim is critical to securing the cash needed to keep the organization afloat.
To help you avoid a cash-flow crisis in this situation, here are four best practices for filing your insurance claim.
1. Call your insurance broker ASAP.
Let your insurance broker know about your situation as soon as you can. Depending on the nature and extent of the disaster, this should be one of the first calls you make.
2. Review your insurance policy with your broker.
It’s important to determine if you have coverage and the type of coverage you have right away. This will help you identify which losses and recovery-related costs you can include in your insurance claim. Losses resulting from property damage are, in most cases, fairly straightforward; however, losses caused by an operations interruption may not be so black and white. These types of losses could continue to accrue until your organization is fully recovered.
For example, say you own a manufacturing business. A tornado touches down during a violent thunderstorm, leaving your plant with a collapsed roof. You hire a contractor to repair the roof. You’ll get an invoice for the roof repair and include it in your claim. During the period the plant is shut down you are losing sales, paying employees and incurring costs to clean up the mess. Does your policy include coverage for these types of costs?
3. Document your losses as you incur them.
As you begin to clean up or rebuild your property, you’ll likely receive invoices and such from the people doing the work. Be sure to save every single bill. You should also keep careful records of what your employees are doing during the disruption, whether it’s cleaning up debris or managing the business’s recovery.
4. Secure the support you need.
Preparing and filing an insurance claim can be an overwhelming endeavor if you’re unfamiliar with the process. Very seldom is it a one-time event. In many cases, an organization must submit multiple claims to the insurance company over an extended period of time.
Before you begin thinking about your claim, consider working with an insurance recovery professional who can help you assess and account for your losses. Most important, an insurance recovery professional can help to ensure your claim accurately and fairly reflects the damages you’ve experienced, leading to a timely resolution. An insurance company will typically cover the fees associated with these services under the standard professional fee or loss adjustment provision of a commercial insurance policy.
With an insurance recovery professional on board, you and your management team can focus on the most critical task at hand: your recovery. If you’d like to learn how PWB can support you in filing a post-disaster insurance claim, please give us a call today.
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