It’s Saturday morning and most risk managers are working. As morning breaks and Hurricane Harvey damage assessments have begun, Frank Russo, EVP of Procor Solutions + Consulting shares 6 key reminders for risk managers as they learn of damages from their teams:
1. Ensure all damages are documented adequately.
Photograph and video footage of the loss are key to memorializing the damages. At some point, these documents will help you settle potential disagreements on items such as scope and pricing. Remind your teams to include pictures of any identifying information such as serial numbers of damaged equipment.
2. Connect with your insurance broker to understand the coverage that’s available including deductibles and sublimits.
Lean on your insurance brokers, partners and policy experts. Connect with your brokers or legal counsel to discuss the damages reports you are receiving and how your policy may or may not respond to each issue. Your brokers are happy to join operational calls to discuss the policy aspects. Make them a part of your team, they are working today too!
3. Enact your recovery plan?—?strategically.
After the damage has been memorialized, it is important to focus on decisions that get your business up and running as quickly as possible. Sometimes there is confusion on whether or not to act to mitigate the loss prior to the first adjuster site inspection. While, you don’t need to ask permission from your adjuster before you act, it does help to keep him or her in the loop as you move to mitigate your loss. More often than not, any decision made to mitigate a loss as a prudent business person is considered favorably by the insurance community. Be decisive.
You can access Procor’s Loss Mitigation Checklist here>
4. Make plans (now) to survey the damage with your adjuster.
If it looks like you have a large loss, contact your assigned adjuster ASAP to set a date to view the damage. It is likely your adjuster is becoming booked. Make every effort to be there in person. Often risk managers rely on facility staff for this inspection. Being there sets the tone and working relationship for the entire adjustment process. In a disaster like Harvey, adjusters will be spread thin and likely do not have unlimited time to spend at your loss. Be prepared to walk the adjuster through the loss and focus them on your business operations. Explain your recovery efforts and your timeline to document the loss.
5. Prepare preliminary loss estimates / order of magnitudes.
As your adjuster begins to review the parameters of your loss, he or she will look to recommend a loss reserve to the insurer(s) for accounting purposes. Prepare a short summary identifying all areas of your loss with associated estimated costs. For example, if there is building damage, obtain estimates for repair to demonstrate the ultimate costs. If claim items are too early to quantify, such as business interruption, include the item as “to be determined” or “TBD.” This will help the adjuster consider the worst case scenario including potential future claim items as he or she sets the reserve.
6. Live, eat, breathe “cash-flow” and how quickly you can substantiate partial payments.
Remember that the claim doesn’t have to be paid only at the end of the process. The adjuster is able to release funds as items are agreed to and supported. As you are able to prove damages through the adjustment process ask for partial payments. This will help you to maintain cash flow for your business during the recovery.
We stand ready to support all businesses with Harvey losses. We are the premier claims preparation and forensic accounting firm for policyholders.