When a loss occurs, from property damage, a cyber event, supply chain disruption, or another operational shock, organizations typically prioritize restoring operations. While restoring operations is critical, preparation for an effective insurance claim recovery can be just as important.
Insurance recoveries often stall not because coverage is unavailable, but because documentation, financial quantification, and communication processes are not aligned early enough in the response. Organizations that approach claims recovery with the same level of discipline used in incident response or crisis management tend to experience faster recoveries and fewer disputes.
Effective recovery practices generally fall into three areas:
- Preparation – Establishing clear claim leadership and response protocols
- Documentation – Capturing operational and financial impacts in real time
- Quantification – Translating disruption into defensible financial recovery
The following practices help organizations strengthen each of these areas.
Establish a “Day 1” Claims Response Plan
The most successful recoveries start early. Organizations benefit from having a simple, repeatable response plan that identifies who leads the claim, who gathers documentation, who interfaces with insurers, and which decisions require executive approval.
A defined plan reduces confusion, improves communication, and helps avoid missed notice requirements or documentation gaps that can complicate coverage.
Goal: Faster stabilization and fewer coverage issues caused by delays, inconsistent messaging, or incomplete records.
Document the Loss in Real Time
Timely, organized documentation is one of the biggest drivers of claim success. Best practice is to preserve the full story of the event, including incident timelines, damage photos, repair scopes, vendor communications, and key decisions with supporting rationale.
For business interruption and extra expense claims, organizations should also retain operational data such as production logs, sales trends, staffing changes, and mitigation actions.
Goal: Stronger credibility and a clear line of sight from the event to the financial impact, improving recovery outcomes and reducing adjustment time.
Track Costs and Activities Using Claim-Specific Coding
Organizations that can quickly separate loss-related costs from normal operations have a significant advantage. Implement claim-specific cost codes, timekeeping categories, and purchase order conventions as early as possible.
Mitigation costs should be tracked separately, such as temporary facilities, overtime, expedited shipping, or alternate sourcing. Supporting documentation should include invoices, contracts, and proof of payment.
Goal: Cleaner claim presentation, less rework, fewer disputes over allocability, and improved auditability.
Quantify Business Interruption (BI) with a Consistent Methodology
Business interruption calculations are often complex and require alignment with policy language. Best practice is to define a methodology early, including the measurement period, baseline performance assumptions, treatment of market conditions, saved expenses, and the linkage between operational disruption and financial results.
Maintaining transparent calculation logic supported by underlying records helps facilitate review and discussion during the adjustment process.
Goal: Reduced friction with adjusters, faster agreement on the business interruption model, and improved predictability of outcomes for leadership.
Maintain Proactive Communication with Carriers and Stakeholders
Regular communication with insurers, adjusters, and internal stakeholders helps keep claims moving. Provide clear status updates, confirm open items in writing, and document key agreements as they occur.
Internally, finance, legal, operations, risk management, and procurement should remain aligned on claim strategy, documentation standards, and settlement objectives.
Goal: Fewer surprises, fewer duplicated efforts, and a more efficient path to resolution.
Treat Mitigation as both an Operational and Recovery Priority
Insurers generally expect reasonable mitigation efforts following a loss event. Organizations should document mitigation decisions and outcomes, including what actions were taken, why they were necessary, what alternatives were considered, and how they reduced the loss.
Examples may include temporary repairs, alternate suppliers, partial operational restarts, or customer retention strategies.
Goal: Lower overall loss exposure, stronger support for extra expense claims, and improved operational continuity.
Perform a Post-Claim “Lessons Learned” Review
Once a claim reaches resolution or a stable stage, organizations should conduct a short review to evaluate what worked well, what caused delays, which documentation was most difficult to obtain, and whether policy terms or limits should be revisited.
These insights can help strengthen incident response procedures and inform future insurance program decisions.
Goal: Continuous improvement that leads to faster recoveries, stronger internal controls, and more effective risk transfer over time.
Where Claims Most Often Break Down
Across industries, several common issues tend to slow or complicate insurance recoveries:
- Loss documentation begins too late or is incomplete
- Financial impacts are calculated before operational assumptions are aligned
- Loss-related costs are not separated from normal operations
- Internal stakeholders are not coordinated on claim strategy
- Communication with insurers becomes reactive rather than structured
Addressing these issues early can significantly reduce friction during the adjustment process.
How BDO Can Help
Claims recovery best practices help organizations move from reactive response to disciplined financial resilience.
By planning early, documenting thoroughly, tracking costs cleanly, and aligning claim calculations with policy terms, organizations can accelerate settlements, reduce disputes, and improve cash flow. These practices also create valuable operational insight that strengthens preparedness for future disruptions.
In many cases, organizations also benefit from involving experienced accounting, claims, or legal professionals to support documentation, valuation, and coordination throughout the claim process. Working with BDO’s Claims Recovery team means you have independent, trusted advisors on your side during a critical time.