Making a claim

As we all well know, anything can happen at any time. This is why having insurance is so important. But, you can’t just buy a policy and forget about it. You need to stay on top of your policies and make sure you know them in and out.

When it comes to the insurance policies you have on your business, you should review them extra carefully, and understand exactly what is covered and what is not in the event of a disaster. This is important because if a loss should occur, you will certainly want to know whether or not you can make a successful claim. It may be a good idea to reevaluate your current coverage to make sure that you have adequate protection.

“Claim preparations for property claims should begin prior to any loss event,” says Allen Hunter, director and senior vice president of Aon Risk Services, Inc. “You need to be able to hit the ground running.”

Smart Business spoke to Hunter about property claims and how to file them.

How soon after an incident should claim preparation begin?

Your broker can help you organize and design protocol procedures to respond to claims. This includes identifying any external resources, emergency responders and/or experts that may be needed.

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, assessment of physical damage and identification of affected operations, including customers, suppliers and any other critical business functions.

Your broker should be at the loss site immediately to assist with the coordination of the response recovery efforts and spearhead each aspect of the claim preparation. And, your broker should interface with the insurance company throughout the process.

Claim preparation involving property damage can seem simple, but even 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.

How can a business avoid interruption and stay up and running?

You can greatly diminish the possibility of an extended business interruption event by having a comprehensive and tested business continuity plan. Such a plan can encompass an entire company or just one critical location or aspect of the business. This allows an organization to proactively respond and react to a loss event and prioritize and direct internal and external resources to ensure quick recovery and continued operations.

Advanced payments should also be requested as a company 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 any extra expenses incurred as a result of the loss.

How often should the plan be reviewed?

At a minimum, plans should be tested annually, and by that, I mean a fully exercised and tested business continuity plan. 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.

How soon should a company expect to see relief in the event of a loss?

When a company is faced with a catastrophic event such as a hurricane or a widespread flood, a rush to secure resources typically follows. Having a comprehensive business continuity plan in place can provide a competitive and strategic advantage that places your company in a position of strength, well ahead of other companies, at a time when everyone is clamoring for limited resources. By having a strategic plan in place, you have already identified and quantified potential vulnerabilities to your operations, completed an impact analysis, analyzed your potential supply chain and logistic weaknesses, and completed business interruption assessments, both upstream and downstream. This head start will help conserve your client base as well as your market share.

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 over 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 claim process and analyzing and documenting each component of the claim that is covered by your insurance program.

ALLEN HUNTER is director and senior vice president of Aon Risk Services, Inc. Reach him at (614) 825-2790 or [email protected].