Monday’s 7.8 earthquake:
HOW TO ENSURE YOUR BUSINESS RECEIVES THE INSURANCE IT’S ENTITLED TO
We believe that you want to fast-track your business recovery and that you want a fair claim settlement. This is exactly how The Claim Settlement Company helps people. With this in mind, we’ve put together 7 important tips to help businesses that might be affected.
What should I be doing?
Your focus will be on minimising the loss and returning to normal operations as quickly as possible.
The common advice is to “Act as a prudent uninsured would” because the business is responsible for taking control and dealing with the situation. Insurers will assist where they can and will then reimburse for the portion of any loss that is insured.
1) Implement temporary measures with the overall objective of minimising supply disruption to your customers. The best outcome is if your customers have a seamless experience and that they perceive no change from normal despite all the work behind the scenes to manage “normal” deliveries.
For example, a Nelson winery will look to managing, re-routing and temporarily running down its stocks around the country to maintain normal supplies to customers. If its not possible to achieve “normal” deliveries to customers, then then perhaps substituting alternative or a better wine quality, or deferring (and confirming) delivery dates for non-time sensitive orders will keep customers happy. These efforts can strengthen long term customer loyalty.
Meanwhile, a Kaikoura printer will subcontract production to other printers to ensure it retains control of the process and its customers orders are delivered on time. Depending on its situation and the damage to its premises the printer may consider temporarily relocating.
Overtime, contractors, temporary repairs, hire, rent or purchase of plant and premises, express freight, alternative suppliers, purchasing finished goods, and using increased advertising and PR agencies are more examples of methods that can minimise the disruption.
Increase your communications resources to ensure interested parties know your status and you know whether they have been disrupted. This includes staff, customers, suppliers and alternative suppliers.
2) Fast-track the permanent solution For example, pay to jump the queue on plant lead-times, use air-freight, pay overtime and bonuses for early completion dates. Get creative about the design, Consent and building process, pre-order materials, running different stages in tandem etc. Increase your resources through using contractors.
Do I have a Business Interruption Insurance claim?
3) Check that the three claim triggers are activated:
i. Have you taken out natural disaster or earthquake cover?
ii. Has there been insured damage? Most commonly:
a. A valid material damage insurance claim, or
b. Transport routes have been damaged, or
c. Prevention of access to your premises, or
d. Damage at customers or suppliers premises, or
e. Closure of your premises by public Authorities.
iii. As a result of any of one or more of the insured damage triggers above, has your business been interrupted?
4) Calculate the loss. Follow the policy formulas based on turnover, gross profit, increased costs and savings. It is intended to capture your actual loss situation and so the formulas specify that you need to combine both historical data and forward estimated projections to calculate what would have happened but for the damage. Depopulation will be an issue.
5) Check your earthquake excess and limits. If the damage occurs at your premises then the excess is normally either a $ amount or a % of total sums insured. For example if you have a 2.5% combined MD/BI site excess with a sum insured of $1,000,000 then insurers will pay losses over $25,000.
If the damage is off site, for example roads or damage at customers premises , then the excess is normally a time limit in days. for example a 21 day excess means that you can claim for losses from Monday 5th December 2016. You should claim for costs incurred before 5th December if the costs mitigated losses that would have occurred after 5th December.
There is often a 10% limit where the damage occurs outside of your property, for example transport routes.
6) Keep good records. Documentation is a key driver of the claims process and so you and your staff need to keep notes, records, photographs and communications relating to the damage sustained, customer enquiries, concerns and cancelled orders, the ongoing disruption you are dealing with and costs incurred to prove your claim.
And one last thing.
7) We believe that you need a business interruption consultant who works for you
At the Claim Settlement Company, we help people recover as quickly as possible when their business is interrupted – by providing expertise in navigating the complexities of business interruption losses and claim settlement - to ensure a business receives the compensation it is entitled to.