Best Practices for Business Interruptions Related to Hurricanes

As Hurricanes Harvey and Irma have stormed through Texas and the Southeast, the aftermath may have left you still dealing with considerable physical damage to multiple units. Even if your business was spared from significant impact, you may have been affected due to power outages, road closures or mandatory evacuations.  Below are a few best practices to consider as you prepare for a smooth insurance claim adjustment process.

  1. Assemble a team to communicate with the insurance company and a point person for the property damage and/or business interruption claim.
  2. For Property Damage:
    • Establish a GL receivable acct. for all direct expenses related to the loss (materials, supplies, vendors, contractors, etc.).
    • For expenses charged to this acct. – maintain a file with invoices, PO’s & receipts. Review vendor invoices for completeness.
    • Track any internal labor associated with loss cleanup, debris removal or any other loss related activity. Include name, date, hours, rates & description of activities.
    • Document with pictures and videos when possible.
    • If there is inventory/stock damage – maintain the following:
      • Perpetual inventories as of the date of loss
      • Post loss quantity counts
      • Cost and/or selling price of lost items
      • Damaged inventory – preserve until insurance company can inspect. If you discard prior to inspection by your insurance company, take pictures.
    • For business personal property (Furniture, Fixtures & Equipment) damaged – prepare a detailed listing of all items (description, location, and asset tracking number), condition (destroyed, damaged, needs cleaning, etc.), replacement cost and any other relevant information as soon as possible. Be sure to take pictures of items.
  3. For Business Interruption:
  • Begin tracking the status of all reservations, canceled reservations, and/or planned events.
  • Retain all forecasts, outlooks, budgets and market statistics that were prepared prior to the loss.
  • Should a significant shutdown and claim occur, the initial information needed will be:
    • Historical/pre-loss and post-loss sales/revenues (monthly and daily).
    • Historical/pre-loss and post-loss profit and loss statements.
    • Historical/pre-loss and post-loss payroll summary reports by pay period.

Learn More

For more information on business interruption claims, please contact Kyle Aldridge or Chris Frederick by calling 770.396.2200.