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FLOOD DAMAGEMy Business has suffered a significant loss, what should I do?
As businesses begin to assess the impact of the flooding, their thoughts will inevitably turn to insurance and how they can manage the claims process effectively to avoid unnecessary difficulties and lengthy delays.
Complicating what is already a difficult situation will be the likelihood that as a result of the widespread damage Insurers and their Loss Adjusters are likely to face significant workloads and challenging logistics.
Against this background, businesses need to have a good working knowledge of the claim process and be in a position to proactively control their own claim to avoid the possible problems that might otherwise arise.
With this in mind, we have prepared the following information for your consideration:
BROAD OVERVIEW• You are the experts in your business and you make
the decisions – your business objectives, not insurers’,should drive loss mitigation and business recovery.
• The process of settling a major claim is lengthyand time consuming. Insurers appoint a rangeof experts to investigate and measure the loss.Substantial information and documentation isrequired.
• Loss Adjusters and other insurer appointed expertsact for insurers. They do not act for you beyondprotecting insurers’ interests.
• The onus is on you to fully document and evidence yourclaim. The quality of claim presentation and supportingdocumentation is critical to a successful settlement.
• Providing inaccurate or incorrect supportingdocuments can be damaging and potentially reducethe value of the settlement.
• Communicate, communicate, communicate –too much is better than too little. Keep insurers’experts informed of progress throughout the periodof the claim and do not release information until youfully appreciate its impact.
• Ensure you are clear about the process and what isrequired of you. If you don’t understand something,ask and ensure you are satisfied with the response.
• Appointing an independent claims consultant canbe advantageous. Select the consultant based on theirtrack record of success and the skills and expertisethey offer.
STRATEGIC PLANNING• Organise the systematic collection of information as
it becomes available – searching through historic filesat the end of the claim is rarely productive.
• Seek the loss adjuster’s agreement; prior to materialcosts being incurred to mitigate the loss and on keydecisions, such as reinstatement methods, mitigation
CONTACTLauren MalkinJardine, Lloyd ThompsonT: +61 3 9613 1423 [email protected]
Ross Mackay Chief Financial OfficerJobs Australia LtdT: +61 3 9349 3699 [email protected]
Any advice contained within this brochure is general advice and does not take into account your objectives, financial situation or needs. You should consider the relevant Product Disclosure Statement and your objectives, financial situation or needs before acting on this advice. Please contact JLT for the relevant Product Disclosure Statement, or for further information. Published by JLT and no part of this document may be reproduced without permission from JLT.
Jardine Lloyd Thompson Pty Ltd ABN 69 009 098 864 AFS Licence 226827 Level 11, 66 Clarence Street, Sydney NSW 2000 Tel: +61 2 9290 8000 www.jlta.com.au
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expenses, time lines etc. Ensuring loss adjusters are faced with the same realities and uncertainties as you will provide greater clarity and reduce the possibility of disagreement as to whether the policy will respond.
• Prepare best and worst case cost estimates as soonas feasible.
• Ensure you identify and comply with critical policyconditions, such as dates and time limits for thenotification and/ or presentation of claims. Failure todo this can result in failure to recover your claim.
• Ensure that all documentation passed to insurersis accurate.
• Communicate any problems, for example withsuppliers, timetables, work schedules etc to theloss adjuster immediately they become apparent –so you include them in the problem solving process.
PRACTICAL TIPS • Set up a daily recording system so that all relevant
facts and events are adequately reported (existingreporting systems may not be sufficient).
• Collect reports, drawings, photographs asappropriate to adequately establish the nature andextent of all loss and damage sustained.
• Document all conclusions of discussions and actionpoints arising from each meeting, leaving no roomfor misunderstandings or incorrect assumptions.
• Ensure that all the time spent by companyemployees on claim related activity is properlyrecorded (including details of the work carried out),this has particular relevance for overtime, temporaryemployees and casuals.
• Justify decisions made with all relevantdocumentation.
• Record all lost sales opportunities in writingimmediately. The ability to prove a reduction inturnover may rely on your ability to identify salesimpact.
• Support all costs by appropriate documentationsuch as purchase orders, work orders,invoices, time sheets, service contacts andmaterial requisitions.
• Recording and Assessing the Damage
• Fully document (videotape or “still” photograph)the damaged plant and equipment.
• Do not remove any damaged plant andequipment until viewed in situ by loss adjuster,unless necessary (i.e. due to safety, to reduce furtherdamage, to recover). If the plant and equipmentneeds to be removed place in temporary storage,do not throw out.
• Conduct a detailed stock take / reconciliation ofplant and equipment to ascertain damaged assets.
• Retain suppliers of damaged assets to assess theextent of the damage (repair v reinstatement) and toobtain a quotation for the recommended response.Consider what steps can be taken immediatelyto either stabilise or temporarily repair assets.Advice should be provided in writing.
JLT FORENSIC – YOUR CLAIMS ADVOCATE
JLT Forensic is focussed on delivering complex claims preparation solutions to maximise your insurance recovery whilst avoiding unnecessary delays.
We are a team of Chartered Accountants with deep technical expertise in both accountancy and insurance, all foundered in preparing complex claims. Our consultants have travelled the road to recovery hundreds of times and can ensure that claims are prepared accurately, utilising the full extent of the insurance coverage, and are submitted to the insurers in a timely manner to ensure that the insured is not required to fund the loss and potentially breaching critical loan covenants.
Our fees are frequently covered by your insurance policy, forming part of the claim and recovery from Insurers.
