Sometimes the unthinkable happens to a business, and it happens in more ways than you might imagine. Catastrophes of all types not only cause physical damage and property losses, but can severely disrupt operations and create additional business losses. Consider these real-life examples:
- An agricultural facility suffers an explosion, disrupting current operations and threatening the ability of the owner to purchase and store inventory from the upcoming harvest season.
- A manufacturing facility that utilizes electric furnaces experiences the failure of a critical piece of hardware, requiring significant work-arounds and production in non-optimal locations until the equipment can be replaced.
- A resort incurs significant physical damage to its accommodations from a storm. The inability to rent rooms during repairs impacts the resort’s restaurants, lounges, spa, and other offerings.
No business is immune from these kinds of disasters and others, including equipment failures or cyber-attacks. When bad things happen, rebuilding and reestablishing business operations is hard enough without having to negotiate with insurance companies, seek funds to aid in recovery, and manage a workforce of displaced employees. What’s more, maneuvering through claim preparation and the entire settlement process can pose further headaches and challenges.
Help Could Be as Close as Your Policy
Before mailing your company’s next renewal payment, review your insurance policy with a focus on your company’s vulnerabilities, as well as coverage limitations that might have been selected without due consideration.
One pleasant surprise for many companies following a loss is the discovery that their policy provides claim preparation coverage. The coverage lets companies pay to retain a loss-accounting specialist to assist in claim preparation.
Companies that realistically approach the potential for an insured-against loss will tend to select a limit for the coverage that is greater than the bare minimum—perhaps $50,000 to $75,000. Depending on the amount of the coverage, claim preparation by a loss-accounting professional may result in no additional cost. Either way, the assistance can be well worth the option.
Realistically, painstakingly identifying and quantifying each component of a claim is not something business owners are used to doing in the normal course of events. In addition, making a business interruption claim is complex and demands more investigative work than a property damage claim. You will need to present your losses in terms that you and an accountant understand, complete with full documentation of income lost and additional expenses incurred—time that may be better spent managing the recovery of your operations.
One advantage of securing a loss-accounting specialist is getting an independent view of what’s reasonable and allowable to ensure your claim will cover all that’s permissible. Here are just a few of the overarching activities required to prepare claims and manage the claim adjustment and settlement process:
- Identify real and potential loss exposures.
- Develop loss determination methods.
- Gather and analyze backup documentation.
- Prepare claim reports.
- Identify and resolve claim issues.
- Negotiate the final claim.
The loss of income and cash flows that occurs in addition to a property loss can be devastating. Getting claim preparation advice or opting for all-out help with the entire process through final negotiations can be a wise and comforting move.
If the unthinkable happens and your company is affected by a loss, Wipfli can help review your policy for applicable coverage, assist in the documentation and preparation of claims, and help negotiate an equitable settlement with insurers.