How soon after an incident should claim preparation begin?
Once the loss event takes place, you should take immediate action, including, but not limited to, focusing on employee and visitor safety, property preservation, notifying your broker and insurance carrier, conducting an assessment of physical damage and identification of affected operations, including customers, suppliers and any other critical business functions.
Your broker can help you organize and design protocols to respond to claims. This includes identifying any external resources, emergency responders and/or experts that may be needed.
Your broker should be at the loss site immediately to assist with the coordination of the response and recovery efforts and should spearhead each aspect of the claim preparation. Your broker should also interface with the insurance company throughout the process.
With its insurance carrier, a company should request advance payments as it completes and documents portions of its claim. These advances will allow an organization to collect insurance proceeds prior to the final submission of the overall claim, thus fostering a quick repair or replacement of critical equipment, as well as providing funds to cover expenses incurred as a result of the loss.
Claim preparation involving property damage can seem simple, but the evaluation of certain types of property can be complex. Claim preparation for loss events involving business interruption and loss of revenue may take a great deal of time and effort.
Your broker should be able to negotiate a final settlement to ensure that your insurance covers what it was intended to and all applicable policy terms and conditions are analyzed and considered prior to the final payment.
When does the relief process begin?
It begins immediately upon notifying the carrier of the loss event. The process from initial notification to claim settlement will vary depending on the size and complexity of the loss. Losses involving significant property damage, business interruption or extra expense can sometimes take more than a year to resolve. Advance payments are commonplace and should be obtained as frequently as portions of the claim can be submitted to the insurers in order to get money flowing.
The key is to make certain that your company and broker are driving the claims process and analyzing and documenting each component of the claim that is covered by your insurance program.
How often should a company’s business continuity plan be reviewed?
At a minimum, plans should be tested annually, and by that I mean fully exercised and tested. This exercise can be coordinated by your business continuity plan specialist, by someone designated as the ‘owner’ of the plan within your organization, or a combination of both.
Another method is to do what is referred to as a tabletop exercise, which is a scaled-down test of your business continuity plan that can be performed by identifying critical pieces or components of that plan that you want to prioritize from a testing perspective.
Anthony V. Palumbo is Director, Client Services at Aon Risk Services Central Inc. Reach him at (314) 854-0724.
