As Hurricane Matthew fast approaches the Southeastern United States, business owners are taking all steps possible to avoid serious damage. Such preparations should include developing a plan to pursue insurance coverage in the unfortunate event of a loss. To assist in these efforts, here are five tips for maximizing insurance recoveries after the storm:
- Know Your Coverage. Depending on the actual damage sustained, there are many types of policies that could respond in the wake of a hurricane. For example, commercial general liability, cyber liability, marine cargo, and inland marine policies all have the potential to provide coverage. However, your business' first-party property policy (commonly referred to as an "all risk" policy) is the line most likely to respond, as it generally offers the broadest coverage for natural disasters. First-party property policies cover damage to a company's physical plant. They also provide coverage for other types of storm-related costs and expenses. For example, a typical all-risk policy will provide coverage for pre-storm preparations, loss mitigation, business income losses (including losses caused by damage to your suppliers or by a power interruption), extra expenses, debris removal, and blocked access to company facilities.
- Be Proactive. Protecting material assets – by boarding up windows and doors, moving raw materials and finished products to higher ground, and relocating portable property – is good not only for your business but also for your subsequent insurance claim. There are two basic reasons for this. First, loss mitigation can be a prerequisite to coverage. Second, many policies will actually reimburse storm preparation costs.
- Promptly Notify Your Carrier. All policies require notice to the insurer following a loss, and most provide specific details regarding the timing and manner of that notice. Although you are required to follow the mandate of your particular policy, it is imperative that the required notice be given as promptly as possible. In certain circumstances, failure to do so may result in a forfeiture of coverage.
- Document Your Losses. It is essential that you carefully document all property damaged by the storm, as well as any resulting expenses. In addition, if your business is forced to shut down, you may be able to seek coverage for losses resulting from the interruption of your operations. Ideally, you should have a protocol in place, such as a daily diary, for recording all actions taken from the time of the loss, including mitigation efforts, extra expenses, etc. Such protocols will ensure accurate and concise records to present to your insurer.
- Rely Upon Insurance Professionals. The period following a significant hurricane is extremely important from an insurance coverage perspective. Understanding the applicable policy provisions, comprehensively documenting losses, tendering a formal proof of loss, and interacting with the carrier's representatives can be a complicated and confusing process. And mistakes in the early stages can have a devastating impact on your ultimate recovery. Consequently, it is essential to enlist the assistance of coverage counsel, insurance brokers, and forensic accountants from the very outset.
With Hurricane Matthew barreling toward South Florida, hope remains that the storm will weaken and significant loss will be avoided. But luck always favors the prepared, and taking the foregoing steps will help to maximize your insurance recoveries in the event that damage does occur. More importantly, you need not go it alone. Whether it's pre-storm planning or post-disaster recovery, give the Lowenstein Insurance Recovery Group a call. We're here to help!