Does your company's business insurance cover all losses in the event of a disaster?

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Does your company's business insurance cover all losses in the event of a disaster?

RGL Forensics is currently evaluating claims for clients and insurance companies that have been victims of the US tornado season, including many businesses impacted by the tornados in Missouri and Alabama.

"The brick and mortar damage after a disaster is obvious, but businesses all over the country are being impacted by these tornadoes even though they weren't in the path of a storm," said Atlanta-based RGL Forensics Partner Ryan Carruth. "Many businesses are suffering economic losses as a result of disruption to suppliers, customers or power sources. Particularly hard hit are the poultry and the textile industries, because so many large plants operate in Alabama and other Southern states."

St. Louis-based RGL Forensics Partner Randy Wilson, said there are many considerations for businesses in both evaluating insurance coverage before a disaster and filing claims in the aftermath. He advises businesses to review coverage and claims for the following:

Property damage claims
Besides obvious losses like buildings, many other physical assets are involved when a business is destroyed. It's important to consider the cost of computers including the value and recovery cost of the data they store, office supplies, equipment, furniture, documents and all other items. No matter how small the object, it should be included in the claim. Photos and videos taken before the loss can help speed the claims process.

Business income claims
Many businesses focus solely on tangible asset losses, but the loss of income to the business during the time it takes to rebuild can be far greater. Here are some questions to ask:

Will the business permanently lose customers or contracts as a result of being closed while rebuilding?
Can the business still operate without a physical office?
Will it take additional time after reopening to rebuild the customer base to the level before the disaster?
Can the business temporarily outsource its production?
Can the business relocate to another nearby location?
Does it have extended indemnity coverage, and if so, for how long?

Contingent time element claims
Contingent time element insurance is typically a coverage extension of standard business insurance and is often carried by businesses whose profitability is heavily reliant upon supply-chain vendors or its customers. These claims require an investigation of the loss to the supplier and/or customer, so it is essential to start these claims as soon as possible to ensure the most accurate assessment of damages. For example, if a business sells flour to a bakery, but the bakery is destroyed and can no longer use the flour, insurance may cover the resulting loss.

"It's important for business owners to consider all of these factors, if possible, before a disaster strikes. Doing so will help ensure businesses will maintain their mission of sustaining operations through difficult rebuilding periods," said Wilson. "If a business is dealing with the aftermath of a disaster, it's easy to panic and miss important and legitimate claims which, in the long run, will help keep the business going."

www.rgl.com

•Date: 24th June 2011 • Region: US •Type: Article • Topic: Disaster recovery

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