Notify Your Insurer.
Typically, property insurance policies require notice of a claim as soon as practicable. Notice requires a description of when, where and what happened to result in a claim. If you have a loss, put your insurer on notice immediately.
File a Police Report.
Make sure to file a police report. Many policies require a police report if the damage results from unlawful activity. This can be a challenge, as it is now, because the police and fire departments are inundated investigating fires and incidents of property damage. Make every effort to report the damage and memorialize your efforts. Obtain a police report or, at a minimum, an investigation number for your insurer.
Assemble Evidence of Damage.
If there are photos, surveillance or any other proof of damage, the material should be secured and provided to the insurance carrier when appropriate.
Protect Your Damaged Property if Possible.
Most insurance policies require a policyholder to take reasonable steps to minimize damage. Board up and secure the property if it is feasible and safe to do so. However, the obligation to mitigate damages is tempered by reasonableness. There is no obligation for a policyholder to put itself or its employees in harm’s way.
Collect Evidence of Lost or Damaged Personal Property.
Secure evidence of inventory and personal property lost. Make a list and assemble records of purchase price, inventory, renovations, etc. Begin gathering evidence substantiating personal property damage immediately.
Secure Financial Records.
Your policy may include coverage for damages resulting from a business interruption. Gather historical financial records of sales, expenses and income for as many prior years as is reasonably possible. Pay attention to the months leading up to the event. The challenge of proving business interruption claims is meeting the burden of proof for lost income. Assembling historical financial information is invaluable.
Identify Potential Witnesses.
Make a list of the individuals who can corroborate personal property damage, inventory, property value or other losses. Assemble this list as soon as possible as it is easy to lose contact with important witnesses after a business suffers a significant loss.
Write Down Important Information.
Write down everything you remember about the incident and create a loss journal. Memorialize names, communications with your insurer, persons who may have important information, involved authorities, and other important dates, times or discussions. Memories fade quickly. Write down everything that could be important before the information is lost.
Find Reputable Contractors to Perform Repairs.
If your property suffered damage, start looking for qualified construction experts who can help assess damage and propose necessary repairs. Insurance policies often limit the recovery of damages to the “period of restoration.” That is the theoretical period of time during which repairs should reasonably be completed and your business up and running again. It is important to get your business functioning fully in the shortest reasonable time.
Promptly Respond to Reasonable Requests for Information.
Your insurer may request that you produce employees for interviews and provide photographs, historical information and inspection reports. . Respond to reasonable requests in a timely manner. If the insurer’s requests become intrusive or unreasonable you may want to consider hiring counsel to protect your rights. Ultimately, the insurer will ask that you provide a Sworn Proof of Loss attesting to the amount of damages.
Preparation, thoroughness and diligence substantiating the extent of loss will reduce disputes with your insurer and maximize the speed with which your claims will be processed. The first step is always to understand the coverages afforded by your insurance policy. If you understand your insurance coverage, memorializing your claim is exponentially easier. As always, Larkin Hoffman is available to help policyholders on their insurance claims.