Clear and frequent communication with your insurance agent or company claims representative and thorough documentation of lost income and additional operating expenses are two important factors for businesses owners to take into account when submitting claims for damages suffered in the Sept. 11 terrorist attacks.
“Businesses should contact their insurance company or agent as soon as possible to report their loss and verify what coverage they have,” said John Eager, senior director of claims services with the National Association of Independent Insurers (NAII). “Insurers and agents will assist their customers in any way possible to begin the reimbursement process.”
Business owners should inspect their property as soon as possible and take steps to protect it from further damage, Eager said. They also should obtain copies of a recent operating statement or income tax return to indicate income that is lost because of the tragedy.
“Businesses should maintain a separate record of their operating expenses while they are trying to re-establish operations and keep track of any extra expenses necessary to expedite their resumption of business,” Eager said.
If a business is forced to close by civil authority, the time and source of that authority should be recorded. Likewise, the time of a power failure should be recorded, if that occurred.
Re-creating business records destroyed by the terrorist attack on the World Trade Center may be a major problem for businesses seeking insurance payments for their losses.
“Financial reports prepared by the company’s independent accountants may provide the most complete financial information for those businesses that did not store copies of their records off-site,” Eager said. “Other sources of some needed information could be tax advisors or a bank where a business obtained a loan, as well as records kept by their customers and vendors, although that information may be scattered and incomplete. The more records a business can provide, the quicker their claims can be settled.”
There are certain to be some disputes, however, over the value of property or the amount of lost revenue. The insurance industry is setting up arbitration options to settle such disputes. One group with special expertise in corporate disputes, which will be the most common after the WTC disaster, is the CPR Institute for Dispute Resolution (formerly the Center for Public Resources).
CPR, headquartered in New York City, is a nonprofit initiative of 500 general counsel of major corporations, law firms and prominent legal academics. Other possible arbitrators include the American Arbitration Association and the Arbitration Forum.
The Institute for Business & Home Safety (IBHS) and the Small Business Administration (SBA) have prepared a booklet, “Open for Business, A Disaster Planning Toolkit for the Small Business Owner,” to help businesses cope with disasters. The booklet is available on the IBHS web site, www.ibhs.org. NAII worked with IBHS and the SBA to prepare the document.
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