Are You Ready for Hurricane Matthew? Top 5 Tips when filing an Insurance Claim
Recently upgraded to a Category 4, Hurricane Matthew threatens to be one of the most destructive storms in decades, the first major hurricane to hit the U.S. mainland since 2005. The official hurricane warning extends from Florida to South Carolina, with evacuations of up to 1.5 million people already underway. Landfall or near-landfall in Florida is expected Thursday night. Officials anticipate significant property damage and power loss affecting millions.
Hurricanes can have a devastating impact on businesses of all sizes. Employees’ safety is at risk, assets are vulnerable and business can be disrupted or even shut down entirely. Business owners and risk managers face the prospect of navigating complex property and business interruption insurance claims in the aftermath.
The number one priority for every business with operations along the southeastern coast is the health and safety of their employees, business partners and local customers. Matthew already caused over 100 deaths in Haiti, and as it heads toward making U.S. landfall, it isn’t weakening. Now is the time for companies to activate their disaster preparedness plans and ensure emergency communications to all stakeholders are already underway.
But if we learned anything from Superstorm Sandy, it was that catastrophic events can have economic ramifications for years to come—and it pays to be prepared. A year after Superstorm Sandy, affected organizations were still going through the claims adjustment and review process. Of the 1.52 million claims filed after Sandy, 13 percent were from commercial entities, accounting for 48 percent of the insured dollar losses. Some local business owners are still rebuilding, nearly four years later.
As businesses across the region brace for Matthew’s impact, BDO Consulting shares its top five tips for getting ready for disaster recovery and filing insurance claims.
DISASTER RESPONSE CHECKLIST
1. Communicate with employees and external stakeholders.
Following the activation of an emergency preparedness program, it is critical to communicate with employees and business partners about their well-being, as everyone will be dealing with potentially significant, or even devastating, personal and professional issues.
2. Review your insurance policy.
Even if a business does not suffer physical damage, it may have coverage for business interruption losses. For example, if a business’s customers or suppliers have been flooded and cannot receive the business’s goods or services, the insurance policy may include what is referred to as “Contingent Time Element coverage.” Non-physical damage coverage for business interruption losses can also include lack of access to facilities (road closures), government declarations of emergency, cancellation of events or loss of utilities, among others.
3. Maintain contemporaneous documentation.
To say that the hours and days after a disaster are hectic is an understatement. This is a trying time for businesses as they try to rebuild and recover. However, keeping careful records even during this time of disruption is critical. Email traffic around current market conditions, cancellations of sales or suppliers/customers being impacted is critical to preserve as it is extremely valuable to a business interruption claim.
4. Get the right team on your side.
A major property claim can take several months to resolve, and the complexity of the issues that may arise requires external experts to look out for a business’s interests while management focuses on what is important—rebuilding and recovering.
5. Establish milestones for claim recovery.
Following a major catastrophe, resources are often stretched thin. It is important to create milestones and hold all members — from the adjusting team to internal stakeholders — accountable for achieving those goals.
For more information about what a business can do in the event of a natural disaster, please contact Clark Schweers, Principal at BDO Consulting and head of the Forensic Insurance & Recovery (FI&R) practice, at firstname.lastname@example.org.
About BDO Consulting
BDO Consulting, a division of BDO USA, LLP, provides clients with Financial Advisory, Business Advisory and Technology Services in the U.S. and around the world, leveraging BDO’s global network of more than 60,000 professionals. Having a depth of industry expertise, we provide rapid, strategic guidance in the most challenging of environments to achieve exceptional client service. For more information, please visit www.bdo.com
BDO is the brand name for BDO USA, LLP, a U.S. professional services firm providing assurance, tax, advisory and consulting services to a wide range of publicly traded and privately held companies. For more than 100 years, BDO has provided quality service through the active involvement of experienced and committed professionals. The firm serves clients through more than 60 offices and over 500 independent alliance firm locations nationwide. As an independent Member Firm of BDO International Limited, BDO serves multi-national clients through a global network of 1,408 offices in 154 countries.
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