As hurricane season and other weather dangers approach us, the following articles are being provided in order to assist our readers in the methods and planing necessary to mitigate and overcome their affects. In the October '13 issue of TLC Magazine we published a comprehensive article titled: Developing a Small Business Disaster Recovery Plan by The Insurance Information Institute. Following are supplementary article(s) by the National Federation of Independent Business addressing the claims process and how one should plan to process his/her claim(s) if ever that should be necessary.
Preparation for foreseeable weather catastrophes should include your attorney, insurance agent, accountant, and city, state and federal agencies that are designed to support you in the event a catastrophe occurs affecting your home and/or business.
Alan Plafker
President and CEO
Member Brokerage Service LLC, A Melrose Credit Union Service Organization
WHEN DISASTER STRIKES: NAVIGATING THE CLAIMS PROCESS
When a disaster strikes your city, you will at first be overwhelmed with concern about the welfare of your family, the future of your business and the seemingly mounting debt. Inevitably, however, the devastation caused by a disaster will raise a number of insurance coverage issues that you will need to address. Consider the following when it comes time to file and resolve your claim:
After the storm passes call your insurance company.
At a minimum, you'll want to ask:
- What types of damage are covered?
- How long will it take to process my claim?
- Will I need to obtain estimates for repairs?
Make temporary repairs.
While it’s OK to take steps to protect your property from further damage, you should hold off on making extensive permanent repairs until the claims adjuster (a person professionally trained to assess the damage) has visited your business and assessed the damages. Make sure you save receipts for what you spend on repairs.
Business interruption losses.
Many property policies cover income that is lost as a result of a disaster like Hurricane Katrina. Plan for business interruption insurance in advance.
Flood damage vs. wind damage.
Most “all risk” business insurance policies cover damage caused by wind and wind driven rain. Those same policies typically exclude damage caused by flood. Insurers may argue that properties damaged by wind, but later flooded are not covered or are only partially covered.
Prepare for the adjuster’s visits.
The more information you have about your damaged property that is insurance covered, the faster your claim can be settled. Have prepared descriptions of as many items as possible, approximate date of purchase and what it would cost to replace or repair them.
- To substantiate your loss, prepare an inventory of damaged or destroyed items and give a copy to the adjuster along with copies of any receipts. Don't throw out damaged items until the adjuster has visited. You should also consider photographing or videotaping the damage. If your property was destroyed, or you no longer have any records, work from memory.
- Identify structural damage to your business and any supporting structures. Make a list of everything you want to show the adjuster such as cracks in the walls and missing roof tiles. You should also get the electrical system checked. Most insurance companies pay for these inspections.
- Get written bids from licensed contractors. The bids should include details of the materials to be used and prices on a line-by-line basis. This makes adjusting the claim faster and simpler.
- Keep copies of the lists and other documents you submit to your insurance company. Also, keep copies of whatever paper work your insurance company gives you and record the names and phone numbers of everyone with whom you speak.
Recovery of attorneys’ fees and adjustment costs.
Some policies cover legal and accounting fees associated with presenting a loss to the insurance carrier. Even if such coverage is not afforded, many state laws mandate that recalcitrant insurers pay for a policy holder’s legal fees incurred to enforce coverage. Insurers often ignore such rights.
Overlapping coverage grants.
Business property policies contain numerous overlapping coverage grants often containing separate sublimits. The lines of coverage may include business interruption, contingent business interruption, extended business income, extra expense, civil authority, utility services, debris removal, expediting expenses and preservation of property. Understanding these different coverage options is essential. In the past, some insurers have categorized losses in a manner to minimize such coverage.
Civil authority.
Most policies cover losses resulting from an evacuation order. Some of these policies provide set time limitations on how long such coverage is afforded. Insurers will likely argue that once a civil authority time limit is met, covered damages cease despite the fact that other overlapping coverage grants continue to provide coverage.
Appraisal.
Insurer delay is common with complex property loss claims. Many policies have provisions that allow the policy holder to force an appraisal to cut through disagreements on value related to both property damage and business interruption. Enforcing such obligations, however, may not be easy, given the overwhelming losses this catastrophe presents.
Specific legal rights under state law.
Louisiana,Mississippi and Alabama all impose penalties upon insurance companies for unfair or deceptive trade practices, triggered by an insurer’s improper handling of a claim.
After your claim has been settled and the repair work is underway.
Take the time to re-evaluate your insurance coverage. Was your business adequately insured? Did you have replacement cost coverage for all of your assets? Talk to your insurance agent about possible changes.
DISASTER PREPARATION AND RECOVERY FOR SMALL BUSINESS
Address Employee Concerns
No matter the emergency, you’ll need to address employees’ concerns promptly and efficiently. Create a phone tree to make sure lines of communication stay open. Make a work schedule that outlines procedures for employees who must remain to control critical operations if necessary. Designate counselors you might use to help employees and employees’ families grieve over the loss of an individual.
Back up Vital Records
Having copies of your paper and digital records will allow you to get your business up and running as quickly as possible after a disaster occurs—even if it’s just a temporary satellite operation. Ready.gov advises businesses to back up computer software, insurance policies, lists of inventory and equipment, lists of vendors and contractors, bank account records, site maps and copies of the emergency plan both on and offsite. In the disaster plan, make note of the location of such records and the individuals responsible for them.
Plan for the Media
No one wants to think about this. But if a serious disaster occurs, especially if someone gets killed, reporters may come knocking at your door. Never refuse to comment, Foulke says, because it looks like you don’t have the situation under control. Instead, deliver a carefully worded response. “I find that it’s important that you respond quickly, proactively and have a unified message when dealing with an issue,” he says.
Plan ahead by scripting four to five possible responses for the incidents that are most likely to occur.
Of course, these guidelines aren’t exhaustive. There are many precautions you should take when preparing for possible disasters. Once you have a plan in place, don’t forget to train your employees. If an emergency occurs, you’ll have a solid shield in place to protect your business.
HOW TO CRAFT A DISASTER PLAN
If a tornado, hurricane or flood struck your business today, would you know how to take cover? If a fire started in your building, chemicals spilled or a terrorist attack occurred, do you have an escape route? Would your employees know what to do?
Creating a disaster plan for your business will not only help you and your employees manage an emergency, but it will also allow you to resume normal operations more quickly after an incident occurs.
“You cannot deal with any type of accident or incident without preparation,” says Ed Foulke, former head of the Occupational Safety and Health Administration and former chair of the OSHA Review Commission. Foulke, who now co-chairs the Workplace Safety & Catastrophe Management Practice Group at Fisher & Philips LLP law firm in Atlanta, suggests creating policies for both natural and man made disasters.
Appoint First Responders
Every policy should designate at least two people to be in charge in the event of a disaster. That’s in case one person is absent or is hurt. They should know any necessary evacuation routes or where to take cover, and they should know procedures for accounting for all employees. “People need to feel like someone is in charge. Those people have to be trained to know how to handle the scenario,” Foulke says.
Create an Investigative Team
All business owners should craft a plan with the assumption that someone is going to get hurt at work especially from a manmade disaster, such as a chemical spill. So you should designate a team that will investigate injuries and deaths in the workplace. Decide who is going to record a timeline of events, make a report and propose and implement recommendations. “Even if police are doing something, you want to make sure you get the facts right,” Foulke says. “Business owners have to be concerned that employees don’t jump to conclusions.”
HOW TO SET UP A REMOTE BUSINESS SITE WHILE RECOVERY TAKES PLACE
In the event of a natural disaster, a remote business site can help you stay in business. Here's how to set one up.
The life of a small business owner is anything but predictable. And depending on your location, your business may face unexpected devastation from a natural disaster. From hurricanes along the East Coast to tornados in the Midwest, preparing for disasters is essential to the continuance of your business.
Imagine, for instance, that a massive flood blocks all roads to your business, or that an earthquake sparks an over night fire in your building. Where would you and your employees go to work the next day? What about the next week? It’s important to have a Plan B, a spot where you can conduct business remotely until your original location is back up and running.
Here are some tips to consider when setting up a remote business site.
1. Embrace the Cloud.
Integrating emergency actions into normal processes is the key to maintaining business as usual throughout a disaster, suggests Sara Sutton Fell, CEO and founder of FlexJobs.com, a job site for part time or full time flexible jobs. “Start by getting into the habit of backing up all files and documents on cloud sites such as Carbonite or Google Documents,” she says. “You’ll be able to access important information outside of the physical office.”
2. Experiment Beforehand with Employee Telecommunication.
In the event of a disaster, chances are employees will need to work from home. Fell suggests doing pre-disaster dry runs to determine if telecommunicating can work for your business. “Try telecommunicating one day a week or once a month to help work out kinks before something bad happens,” Fell says. “Educate employees to use communication services that allow them to stay connected from home such as email, instant messaging, message boards, and phone or video conferencing.”
3. Use a Co-Working Facility.
If a disaster destroys your physical office it may be important to find a location to host client meetings or conferences. “An alternative location gives business owners an actual address to use while the original site is in recovery,” suggests Wes Walker, who owns an Intelligent Office franchise in Boston that provides virtual office services and technologies. Like Intelligent Office, many temporary office locations are equipped with furnishings, conference rooms, Internet access, mailboxes and a receptionist to answer calls and take messages, a godsend when you need customers to be able to reach you.
4. Stay Connected with Employees and Customers.
If a disaster takes down power lines or destroys your physical building, sustaining contact with your employees and customers is critical. Be sure to update emergency contact methods for customers on your Facebook page or website such as alternative phone numbers and mailing addresses. Also, plan a phone tree for employees to tell them where, and how, business will be conducted in case of an emergency.
5. Set up Transaction Support.
Your business can’t afford to miss revenue during a disaster so finding a reliable payment method ensures you will get paid for your services should mail delivery cease or your building is inaccessible. “Make credit card transactions available,” whether or not you have a machine handy, Walker says. This may mean setting up a PayPal account or implementing online payment options on your website.
© 2013 TLC Magazine Online, Inc. |
