In the aftermath of a hurricane, businesses must take immediate action to move through the insurance claims process effectively and recover funds. Failing to do this correctly can result in financial losses and lengthen operational disruptions even further.

Here are the essential actions needed for businesses dealing with property damage and business interruption from a hurricane.

1. Notification and Initial Steps

Following the hurricane, immediate action will help you secure the coverage you need, and this begins with quickly notifying all potentially impacted carriers as required by your policy.

Around the same time, assemble a claims team that can spearhead the rest of the insurance recovery effort, including internal personnel (risk management, finance, operations, and legal) and external resources (broker advocate, forensic accountant, and coverage counsel).

2. Policy and Documentation

After notifying the appropriate carriers, make sure you thoroughly understand your policy and ensure all documentation is in order. This will help you meet your policy requirements and facilitate a smoother claims process.

  • Policy Duties and Deadline Review: Understand all responsibilities and timelines under your policy.
  • Document Mitigation Measures: Keep records of actions taken to mitigate property damage and business income loss, such as using inventory or other locations. For example, if the hurricane caused flooding, document the use of sandbags or water pumps to prevent further damage.
  • Response to Requests: Provide documents such as business records, bills, and invoices promptly when your carrier requests them.
  • Note Key Deadlines: Note deadlines for filing a signed, sworn proof of loss and request extensions if needed.

3. Financial Tracking and Record Keeping

Accurate financial tracking and meticulous record keeping will be needed to support your claim. Setting up dedicated systems will help you manage these tasks efficiently.

  • Establish Dedicated Accounting Codes: Track all claim-related costs and expenses separately.
  • Track Employee Time: Document time spent on claim-related activities like cleaning, property repairs, and other recovery efforts.
  • Maintain Closure Orders and Communications: Keep copies and document mandatory curfews, utility service interruptions, access issues, and communications from suppliers or customers. For example, if local authorities issued evacuation orders during the hurricane, retain these notices.

4. Proof of Loss Preparation

Gather all necessary information to prepare a comprehensive proof of loss. This will serve as the foundation for your claim and demonstrate the extent of your losses.

  • Collect Necessary Information: Gather historical profit & loss statements, sales forecasts, budgets, payroll registers, sales contracts, lease agreements, and property damage assessments. If the hurricane destroyed your inventory, include records of inventory levels before and after the hurricane.
  • Document Canceled Orders: Record all canceled orders, reservations, and expediting expenses.
  • Assess Property Damage: Compile reports and estimates from contractors and appraisers regarding the extent of property damage.

5. Claim Submission

Utilizing the internal and external claims team you have assembled, prepare and submit your property damage and business interruption claims with all required documentation and a clear narrative explaining the impact of the loss event on your operations.

  • Prepare Property Damage Claim: Ensure it includes detailed assessments and repair estimates conforming to the valuation provisions of your policy. For instance, this could include repair estimates for structural damage caused by the hurricane’s high winds.
  • Prepare Business Interruption Claim: Ensure it conforms to the valuation provisions of your policy.
  • Develop Claim Narrative: Explain how the loss event has impacted your ability to conduct business and the steps taken for recovery. Describe how the hurricane disrupted your operations, such as flooding that prevented access to your facilities.

How We Can Help

Our team is ready to help you. From assessing property damages to managing insurance negotiations, we are committed to helping your business recover as quickly and effectively as possible.

Stout carries world-class credentials in insurance claims consulting. Our team is comprised of forensic accountants, economic and financial experts, and other risk and insurance industry professionals dedicated to assisting policyholders prepare, present and resolve complex insurance claims.