Wall St Journal Request

The other day, I received a request for info on how a business can manage insurance claims after a disaster. My reply was sent before we knew the devastation from Katrina. Here’s what I said:

— Obviously, one of your first calls is to your insurance agent / company.

–Take lots of pictures of the damage and site. Document the damage. Don’t throw anything away unless you are told in writing (or you confirm it in writing) by your insurance company. Salvage what you can and protect it from further damage.

–The adjuster should be on site very soon after the disaster. Most insurance companies have “Cat Teams” sent in to take care of the large number of losses. Business owners should work with their adjuster as a professional. Ask for specific instructions from the adjuster. Document all conversations. Confirm all verbal instructions in writing (email is ok but print out hard copies). Keep all records together in an organized manner – a three ring binder can work well.

–Involve your insurance agent in the process early and often. Copy her on every letter and include her in every meeting.

–If you have a preferred contractor, make that known to the adjuster early. In times of catastrophe contractors will be quite busy. Opportunists rush in. Don’t hire anyone until you have spoken with the adjuster.

–Realize that the adjustment of a fire loss is an ongoing negotiation. The policy says the insurance company will pay to rebuild your building. Rarely do people rebuild exactly what was there. Additions to what you had may not be insured. Work with your adjuster. Your agent can help with understanding how the policy works. Occasionally the business owner will need outside help – a consultant or public adjuster.

–Most insurance companies will advance payments on large losses so you can pay for immediate expenses. Keep all receipts. Document everything.

–Most business owners have loss of business income coverage and extra expense protection. This helps with the increased cost of getting back into business quickly and lost profits / continuing expenses. Your agent or advisor can help with this part of the loss. Your accountant will be involved too.

–Remember, if your vehicles are damaged, look to your auto insurance. Injured employees (injured while working) are covered by workers’ compensation.