Catastrophe ChecklistFiling a Property Claim After a Hurricane

February 2012 • Lockton Companies, LLC

L O C K T O N C O M P A N I E S , L L C

WILLIAM OKLESENCAT Team Lead

Vice President, Claims Manager312.669.6706

boklesen@lockton.com

CAT TEAM CONTACT INFORMATIONInsurance claim preparation will be an important process

for any loss or damage from a hurricane. The most

common insurance claim likely to be suffered, in addition

to the physical damage to property, will be for the loss of

business income. Business interruption and extra expense

insurance will help defray lost income and emergency-

related expenses.

Lockton Claims Consultants will assist you in evaluating your claim. They will fully explain the steps to be taken. Until discussing with Lockton and your insurance carrier, continue to conduct your operations as normally as possible, making business decisions as if you had no insurance. Insurance is designed to help businesses recover from the loss. When practical, the focus should be on keeping the doors open and the impaired business functioning.

Expedite the Claims Process

A business owner can take several steps to expedite the claims process, including:

1

Inspect

Immediately inspect the loss to determine the extent of damage, taking steps to salvage damaged property. Professional salvage firms may be able to assist the business owner with this task.

2

2

Create a List

Prepare a list of the steps required to resume operations promptly on a full-time or even a part-time basis.

3

Call Lockton

Contact Lockton to report the loss to the insurance company so a claim adjuster may be assigned.

4

Review Coverage

Review the insurance policy with Lockton to discuss coverages. Lockton will help you review and understand the policy. Your insurance carrier will make the final decisions on coverage.

Handling the Physical Property Damage Loss After a Hurricane

� Protect your property from further damage.

� If applicable, board up the premises and correct unsafe conditions.

� Separate damaged from undamaged property.

� Restore sprinklers, lights, power, alarms, and other utilities and security systems.

� Provide security for property.

� Begin repairing critical equipment.

� Proceed with emergency measures to prevent continual or additional damage (e.g., cleaning and drying).

� Identify all civil authorities involved—such as fire, police, health department, building inspector, EPA, or OSHA.

� Record any communications received regarding an order to evacuate. How did the business get the word? A written order? A verbal order? Someone heard it on the radio? Save any written orders or flyers received to document the claim.

February 2012 • Lockton Companies, LLC

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� Confirm the type of loss—wind, water, hail, etc. Understand what perils are covered. Typically, covered perils include fire, explosion, lightning, riot, storms, and so on.

� Identify any contributing or secondary cause of loss; this is very important for subrogation purposes.

� Take photographs of all damage prior to the removal of any debris.

Collect and Retain Documentation to Support the Property Loss Claim � Invoices

� Purchase orders

� Repair quotations

� Repair costs (temporary and permanent)

� Time and material invoices and expenditures

� Labor time records

� Cleanup costs

Handling the Business Interruption Loss After a Hurricane

� Gather Financial Records—Provide a copy of the most recent operating statement or income tax return, along with what sales records are available for presentation to the insurance adjuster for calculating the loss. Subject to policy terms and exclusions, business interruption insurance is specifically written to replace the income the business would have provided had operations not been interrupted. This is usually based on the business’ financial history, as well as other local and economic factors.

� Track Losses—Close out the books as of the date of the loss, and maintain an accurate separate record of the operating expenses that continue during this period. Remember that the insurance adjuster will probably want to verify these expenses as part of the claim process.

� Document Power Outages—If the business interruption involves the loss of electrical power, document, to the best of your knowledge, when it went off and when it was restored. If any written information was received regarding the power interruption, be sure to save it as documentation for the claim.

When practical, the focus should be on keeping the

doors open and the impaired business functioning.

February 2012 • Lockton Companies, LLC

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Additional Information to Collect and Retain to Support a Business Interruption Claim

� Extra expenses incurred to continue operations

� Production records.

� Sales journals

� Manufacturing cost statement

� Payroll journals

� Material usage reports

� General ledger

� Profit and loss statements

� Inventory records, quantities, and values

� Other data as situation dictates

Proof of Loss Statements Required by Insurance Companies Can Include:

� A statement about any other insurance that may apply.

� Confirmation of the total amount claimed.

� A summary or recap of the claimed loss by category.

� Supporting documentation, invoices, purchase orders, and replacement costs.

Coverage for a Loss is Dependent on: � The covered perils or causes of loss.

� The excluded causes.

� The facts of each individual loss.

While your insurance carrier will make the coverage determination and amount of a claim payment, Lockton provides critical assistance. The effectiveness and clarity of your claim preparation and presentation greatly impacts coverage and the amount recoverable under the insurance policy.

Taking the practical steps in this checklist will help you present your best case, generating the best outcome. Lockton is here to help you work through the challenges after a catastrophic loss.