Westfield Insurance weathers the storm Featured

7:00pm EDT November 25, 2008

Tornados, floods and other catastrophic events can have a devastating impact

on your business. In addition to possible damage to your own building or inventory,

there is the potential for loss of infrastructure services like power, water, or data

and telephone lines. Road closures or even

complete lockdown of devastated areas are

also common after a severe storm.

“The ability to repair, reopen or relocate

your business can be the key to survival,”

says Corry Novosel, director of Catastrophe

Claims Operations at Westfield Insurance.

Smart Business spoke with Novosel

about how to protect and preserve your

business when faced with catastrophes.

How can business owners mitigate risks?

A well-rounded insurance plan should

consider the possible catastrophic events in

your local geography. Tornadoes, floods

and even a terrorist event in a nearby city

can impact nearly any business at any time.

Until this year, Ohio business owners

would have laughed at the idea of being

affected by a hurricane, but the remnants of

Hurricane Ike struck large areas of Ohio on

Sept. 14, 2008. Winds as fast as 75 miles per

hour caused one of the largest storms in the

state’s history with damage estimates as

high as $1 billion.

How can you uncover commonly missed

areas of vulnerability?

First, you need to consider the ancillary

impact of a catastrophic event. What

impact would a tornado or flood have on

your supply chain or delivery? Would you

lose customer traffic or be unable to access

data, records or billing?

Next, you should discuss often-excluded

causes of loss with your agent. Flood damage, for example, is often not covered

under typical commercial policies. Loss

caused by the interruption of power to your

property or by road closures by municipal

authority may also be excluded.

Finally, think about business income coverage. In many instances, the loss of business income exceeds the cost of repairs to

the building. Even if you are a tenant, catastrophic damage to your building or your

area can result in suspending operations for

weeks or months.

What are the best ways to speed the recovery

process?

Provide good contact information when

you turn in your claim; many times, it is difficult to locate individuals in the aftermath

of a catastrophic event. Also, don’t wait for

your claims person to contact you before

working on your own plan of action. The

sooner you have a plan in mind, the sooner

you can be advised on what is covered.

What are some important dos and don’ts following a storm?

  • Do report your loss. Contact your agent

    or the 800 number for direct claims reporting to your insurance carrier. The sooner

    you notify your carrier of your loss, the

    sooner you will be contacted and the

    process of handling your loss started. 

  • Do take emergency measures to mitigate additional damage to your business. In

    the end, you may not be covered for the cost of removing flood water from your

    floor, but leaving it there for a week while

    you await your carrier to call will not help

    the situation. 

  • Do document your loss. Taking photos

    is always a good idea. Keep all receipts for

    any emergency repairs. Your policy requires damaged property be available for

    inspection. If you must throw out damaged

    goods before your claims representative

    arrives, be sure to document them before

    they are hauled away. 

  • Don’t panic. Your policy is a contract

    like any other. If you are covered for loss

    caused by wind, you will be paid for covered damages caused by wind. The best

    way for you to avoid coverage surprises is

    to meet with your agent on a regular basis

    and understand what is covered and what

    is not. 

  • Don’t assume your claims person is

    familiar with the details of your business.

    While it is likely the person handling your

    claim has an understanding of commercial

    enterprises, you can help him or her by

    explaining how this loss is impacting your

    operations. Good communication can often

    alert your claims professional to coverage

    you may not realize you purchased.

 

What else should businesses know?

Most insurers understand that their

response to catastrophic events is an

opportunity to make a very positive

impact. Keep in mind, however, that the

intake of thousands of losses and the

movement of hundreds of claims persons

to an area that may have limited infrastructure available is, at best, difficult to coordinate. Initial focus is usually on making contact with all claimants and assessing the

most severe losses using the triage system.

Less severe losses may be handled later

with instructions to the insured to make

any necessary temporary repairs and begin

the process of finding a repairer who is

willing to come out and write an estimate

of damages.

CORRY NOVOSEL is the director of Catastrophe Claims Operations at Westfield Insurance. Reach him at (724) 776-7200 or

corrynovosel@westfieldgrp.com. Westfield Insurance provides commercial and personal insurance services to customers in 17 states.

Represented by leading independent insurance agencies, the product we offer is peace of mind and our promise of protection is

supported by a commitment to service excellence. For more information, visit www.westfieldinsurance.com.