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