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How Businesses Can Maximize Insurance Recovery After a Disaster

by | Oct 20, 2023 | Firm News |

The recent fire on Maui sent shockwaves through California, no stranger to the ravages of record-breaking wildfires. For businesses, various first- and third-party insurance policies are a safety net against the damages and liabilities associated with natural disasters. Policyholders spend substantial premiums to protect themselves in the event of such disasters, whether such be fires, earthquakes, floods, volcanic eruptions and beyond.

However, the road from disaster to insurance recovery is often far from straightforward and many policyholders finds themselves in a battle with their insurance companies in hopes of securing the financial relief they believe was guaranteed by their policies.

Standard Procedures

Some common early steps in initiating a claim are common sense. Reviewing the policy to re-familiarize yourself (at least from a 30,000 foot perspective) of the general coverages afforded is a good idea. When doing so after a fire or other disaster, the policyholder should note any questions about coverage specific to the event and discuss them with their insurance broker or agent (Note that in California, there is a big difference between insurance brokers and insurance agents.).

It is essential to extensively document the damage by capturing still images, videos, and take detailed notes. Indeed, all policyholders should periodically document (video and still photography) their property holdings—exterior and interior—and especially particularly valuable components. Doing so before a loss will usually make the claim process following a disaster smoother. Gather all relevant business records (invoices, receipts, contracts, financial statements) to substantiate losses. Assuming your broker or agent has already reached out to check in and provide support, policyholders can start the formal claims process.

Now, The Disputes Begin

Insurance companies claim they are there to provide peace of mind for their customers; but, they are also for-profit corporations. Their goal is to maximize revenue from policies while minimizing the claim payouts. Particularly when a major event, like a wildfire, can result in substantial losses across many insured business and residential properties, insurance companies frequently may take more aggressive coverage positions to protect their bottom line (at the obvious expense of their insureds).

Negotiate A Settlement

Policyholders need not accept the initial offer from their insurance companies. Armed with meticulous documentation, policyholders can help themselves try to negotiate a fair settlement. These disputes, however simple, can become complex with widely differing valuations of real property, lost assets and stock, business interruptions, and other details.

While policyholders undertake substantial groundwork when filing a claim, the next step often involves bringing in professionals to help validate claims and dispute the insurance adjuster’s unfair valuations or unreasonable interpretation of their coverages. Sometimes, the support of an expert legal team is necessary to obtain the coverages you have been paying for over many years. Perhaps a well-crafted letter from an attorney is all that is needed to get the dispute resolved. Still, it’s prudent to prepare for potential legal action if the insurance carrier proves uncooperative; the assistance of an experienced legal team may be the only way to secure a just payout.

Securing insurance recovery after a disaster is a battle for which businesses often find themselves unprepared. If you’re navigating such a situation and need guidance, our team of experienced legal professionals can help you address these situations. Schedule a call with us today, and let’s work together to ensure that you receive the support and compensation to which you are entitled.