The Association of British Insurers estimates that insured losses and damages suffered by individuals and UK businesses as a result of the riots, fires and looting over the past few days are likely to exceed £100m.It’s clear that many businesses in major cities up and down the country have suffered significant loss. That’s not just through damage to their property and theft of their goods, but also by being forced to stop trading as they close early to avoid further loss (even if the businesses in question were not directly damaged as a result of the riots). It seems likely that many commercial insurance policies will cover the costs of repairing the damage and the associated business interruption losses. Therefore, it’s now fundamental for a business’s recovery that they maximise the prospects of a full and speedy payment of losses claimed under their insurances. Proper preparation, communication and negotiation of the claim will significantly help policyholders in doing so. The last thing that businesses need is an argument with their insurers over what is and is not covered under the policy. To help businesses who might be affected by the riots and looting, here are some practical tips for maximising the prospects of a successful commercial insurance claim, so that that those businesses are then much better equipped to get themselves back on to their feet:
- At all times during the life of the claim, work with your broker. The British Insurance Brokers Association has urged those affected to contact their broker as soon as possible.
- Remember the importance of prompt notification of claims to insurers in line with the policy terms. Notice is almost always a condition precedent to an insurer’s liability under the policy.
- Effective project management of a large insurance claim is key. For example, decide who is going to lead the team (preferably designate a single point of contact for internal and external communications), keep a record of correspondence (meeting notes, emails, letters) with insurers and adjusters and indentify what information has been sent to them and when.
- Do you need any outside professional help to prove the claim and deal with any issues/queries raised by insurers? If so, who should be in that team?
- Make sure you get your insurer’s prior consent to incurring the costs of employing outsiders to help in the business recovery process if you expect those costs to be covered by the policy (e.g. professionals to assist with quantifying business interruption claims or temporary staff to help with the clear up). If you don’t do so, there is a risk that insurers will refuse to pick up the tab.
- Prove your claim effectively and efficiently. Provide evidence of all losses to insurers and think about how that will be done, when and by whom. Comply with any policy deadlines for submitting that evidence and, if necessary, secure a time extension from insurers.
- Establishing property damage loss is relatively straightforward but business interruption losses require more thought and planning. Think about instructing staff to use timesheets to evidence time spent dealing with aftermath and record that time contemporaneously; carry out a “stock check” and list equipment that used to be in particular work areas and which have now being stolen, damaged or destroyed; instruct staff to record any instances where work or tasks are redeployed or deferred due to the demands of dealing with the aftermath; collect evidence of increased liabilities/lost opportunities (e.g. minutes, emails, memos etc); establish accounting codes against which additional costs/expenses can be charged (e.g. example, renting additional office space, overtime or salvaging).
- Remember your obligation to co-operate with insurers and loss adjusters as they investigate the claim.
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