Tips for the Winter Weary
From burst pipes, to collapsing roofs, to mass power outages, this new year’s harsh winter weather has thrown yet another challenge at business owners already struggling with the ongoing effects of COVID-19. Those who purchased property insurance policies, especially with robust business interruption coverage, may be able to reap the benefits of that coverage. Whether and how much, though, may depend on how well those claims are handled. Here are a few tips that may serve your business well for this latest challenge as well as the challenges yet to come:
- Mitigate your loss: As an insurer may readily advise, policyholders have a duty to mitigate. That same insurer, however, may neglect to mention that mitigation expenses may also be reimbursed. So, by all means, do what you reasonably can to minimize your company’s loss. But also keep track of what it costs—whether that is the cost of a professional mitigation service, temporary repairs to keep weather out, or just the cost associated with installing tarps to cover a roof or blowers to eliminate moisture.
- Communicate early and often: Policies have certain notice requirements. Make sure you satisfy them. Let your broker, if you have one, know first thing that your business has suffered a loss. They should be able to help. Beyond notice, let your company’s insurer (or adjuster or claim administrator if one has been assigned) know what you are doing or intend to do for cleanup, debris removal, and mitigation. The insurer may want to inspect the damage or take photographs or video before you do. By all means, give them an opportunity to do so.
- Take charge of your claim: Nobody knows your business better than you do. Nobody knows how this loss has impacted your business better than you. No insurer or adjuster can be as present as you can. Do not wait for an insurer or adjuster to tell you what they need. Take the initiative. Document everything. Take photographs and videos as soon as you can and as thoroughly as you can to visually document the damage. If completed products, raw materials, equipment, or other personal property has been ruined, photograph and catalogue them before you throw them out. If you are incurring additional expense either to mitigate your loss or operate your business while your property undergoes repair, make sure you are adding that to the list. Business interruption often saves expense even as it incurs expense and diminishes income. Thoroughly understand and document how the loss has impacted your company’s expense, income, and assets, so that you can successfully demonstrate and communicate how your business has suffered and what complete restoration looks like.
- Keep a centralized record: Your company’s accounting and other business records may well be sufficient to document much of your loss. But an expense (and supporting documentation) that shows a loss that resides among your ordinary business expense records may just as well be buried in the sand if it stays there. Keep a centralized record, claim specific calculation and dedicated files to document your claim. Link or duplicate records as needed so that everything can be found and loss totaled in one place.
- Know your policy: How you describe your claim and what caused it may make a difference in how an insurer adjusts your claim. Knowing what your policy covers and what it excludes will aid you in maximizing your recovery. Certain losses may fit in more than one bucket. If one bucket has a lid or a hole, look for another bucket. You may come across a category of coverage you had not considered. Looking through your policy may also help you identify other losses your company suffered but that you did not include in your loss documentation. If your policy does not expressly mention a type of loss your business has suffered, do not presume it is not covered. What is not said is often as important as what is. If not specifically excluded, the loss may well be covered.
- Do not close your claim too early: Losses, especially business interruption losses, may take some time to fully mature. Business interruption coverage, in particular, may be limited in duration but do not confuse a better than expected month with complete restoration. Also, make sure you do not misinterpret policy language that may seem confusing or difficult to understand to self-limit recovery.
- Do provide interim documentation: Not closing your claim too early, does not mean withholding information until you are ready to finalize your claim. Insurance companies often pay advances based on preliminary documentation. Periodically, submit the information you have gathered and ask for advances as appropriate. Cash flow should reduce your expense and may well speed your recovery.
- Know your deadlines: In addition to notice requirements, your policy may have certain deadlines, including proof of loss deadlines and deadlines for filing suit. Make sure you know what those are and can meet them.
Be prepared to push back
If you have been told that all or part of a loss is excluded, limited or otherwise not covered, because of how you have described it, what the insurer says the policy means, or some deadline the insurer says you need to meet that you are not sure you can meet or, worse yet, you have missed, resist the temptation to capitulate or settle for less than full recovery. An experienced insurance recovery professional may have the solution. Perhaps the most important advice for a business owner suffering from a loss, especially a business interruption loss, is to speak up and take action. If you feel that an insurer’s demands, delay, or denial are questionable or unwarranted, consult with an experienced policyholder advocate as soon as possible.