Newsletter: November/December 2008 Newsletter

When a loss occurs, there is usually a lot of scrambling. First, to care for any injured; second, to tackle the cleanup; third, to attempt to get your business up and running; and last, but certainly, not least, to deal with the dreaded insurance claim. There are a few tips to remember, which should help you to prepare to handle a loss and, then, once a loss does occur, to work with your insurance broker and insurance carrier to resolve your claim timely and without so much frustration.

 

In preparation for a loss, read your policies. I know you’re probably saying, “you’re kidding right?” No, I’m not kidding. It is critical that someone in your organization is intimately familiar with the coverages your firm has purchased.   In reviewing the policies, you should note not only the coverages provided, but also the responsibilities of each party to the contract (your company as the insured and the insurance carrier), any exclusions or enhancements to the base coverages and the process for resolving any disputes. 

 

Next, if you don’t have a team within your organization already established to deal with a major catastrophe, do it now. Why? This will cut down on the time it takes to get everyone together to initially assess what has to be done to get back up and running as soon as possible. You should consider having individuals responsible for Accounting, Legal, Public Relations, Risk Management (Insurance), Human Resources, Operations, etc. assigned to the team. Each party should be made aware of their responsibilities from an insurance standpoint prior to the loss so they can be thinking of what they will need to do if a loss occurs. It is a good idea to provide these individuals with a synopsis of your company’s various coverages – again, so they can be thinking in those terms. 

 

If there is an impending loss such as a hurricane, it is an extremely good idea to contact your broker and request their assistance in notifying your company’s insurance carrier so that they may assign resources to be on site immediately after the hurricane to meet with your company representative to immediately begin the claim process. Developing a relationship with the insurance carrier’s representative early can be a major asset to resolving the claim quickly. 

 

Once a loss occurs, the most important thing from an insurance standpoint is to immediately notify your insurance carrier to establish a claim.   Cooperation is key, (and also a requirement of the policy you read – right?) so make every attempt to provide them with the documents/pictures/forms they request.   Another important condition in your policy is to protect your property from further damage. I had one client who had a fairly large mold claim denied as the carrier believed they did not make reasonable efforts to quickly clean up water after a loss. Thereafter, make every attempt to provide the adjuster with frequent updates on cleanup, equipment damage, business interruption, etc. Insurance carriers do not like surprises. Request assistance from your broker in preparing your claim submission, as there may be items that you have not considered to be part of an insurance claim. Your broker can also assist with coordinating meetings/conference calls between the parties, reviewing coverage, challenging denials, and obtaining advance payments and responses to coverage positions. I urge you to involve them very early on in the process and discuss their role.  

 

Rutherfoord has established a list of best practices in the handling of property claims that we would be happy to share. If you would like to request a copy, please e-mail either Hunter.frischkorn@rutherfoord.com  or karen.kestle@rutherfoord.com.