Insurance is critical to recover from natural disasters, but the claims process can be complex.
Key takeaways
Understanding the parties involved can reduce ambiguity and increase the success of claims.
Knowing how parties work together allows you to increase focus on business recovery.
No company is immune to the potential damage related to natural disasters. From hurricanes and wildfires to droughts and winter storms, disasters can have significant effects on company operations, profitability and ultimately, sustainability. Insurance coverage plays a critical role in recovery, but completing the claims process can be a complex undertaking. Understanding the parties involved and their roles can eliminate much of the ambiguity, increasing the speed and success of your claim and enabling you to move forward with confidence.
Getting to know the parties involved
Several people play critical roles during the insurance claims process, within both the insurance company and your organization. Coming into the process knowing who is involved and what to expect can help you get back to business quickly and avoid potential obstacles.
Insurance company team
1. Insurance company
The insurance company underwrites or takes on the risk when a loss occurs. By pooling a group of policies, they can provide insurance with reasonable premiums. They estimate the premiums to charge their policyholders so they can afford to pay claims that arise. The insurance company is ultimately responsible for paying your insurance claim—they cut the check.
2. Insurance adjuster
The insurance adjuster acts on behalf of the insurance company. The adjuster may be employed by the insurance company (as an in-house examiner) or they could be a third party who specializes in adjusting claims (an independent adjuster). They review your claim and recommend to the insurance company the amount that should be paid to you. If necessary, the insurance adjuster will hire other professionals to help them resolve your claim.
3. Forensic accountants
The insurance adjuster often hires forensic accountants to help them review and verify the claim from an accounting perspective. Accountants are most frequently involved in the business interruption claim (your profit loss and additional expenses incurred because of an incident) as well as inventory valuations for damaged goods. They will determine whether the claim is reasonable and whether there is appropriate supporting documentation for the amounts claimed by you.
The accountants will present a report to the insurance adjuster showing their calculations and what documentation was available to support the amount. The insurance adjuster then reviews the report and makes the final recommendation for payment from the insurance company.
4. Forensic engineers
The insurance adjuster may hire a forensic engineer to help determine the cause of the loss (not all losses are covered by insurance) and other relevant factors. This is often called an origin and cause investigation.
5. Restoration or cleanup contractors
These contractors will be hired, often directly by the insurance adjuster, to help clean up your premises and repair any damage. They frequently deal with water, fire and other damage and have the experience and equipment to make repairs. If you wish to hire your own contractor to do the repairs, speak to your insurance adjuster about your available options. It's important to know that you aren’t required to use the insurer’s contractors.
Your claim team
Your business
Your business is the entity that incurred an insured loss. The goal is to get your business back on track and quickly get the insurance proceeds that you are entitled to. You and your staff know your business best. You are vital to restarting your business quickly and getting the insurance claim settled.
Your experts
You can hire any of the same type of experts that the insurance company hires. You should consider doing this to ensure you have professionals with your best interests in mind. Many insurance policies will pay for experts that you hire, which can be valuable.
Your insurance broker
Your broker is often a good resource to discuss your insurance coverage in the event of a claim. They can assist with identifying what is covered under your policy and may also get involved with discussions and negotiations. Generally, they want you to be satisfied with the product that they sold you.
Your forensic accountant
A forensic accountant, such as RSM, will work with you and your team to help you get the maximum permissible insurance payment. A qualified forensic accountant will know how the industry works and will prepare your claim accurately to expedite verification and processing of your payment.
Your public adjuster
A public adjuster is a licensed insurance professional who acts as an advocate for the policyholder (i.e., the property owner), representing their interests in an insurance claim filed after significant property damage from an event like a fire, flood or storm. They can handle the entire claims process by documenting damage, gathering supporting evidence and communicating with the insurance company on the policyholder’s behalf to achieve a settlement with the insurance company. Essentially, they work as a claims advocate on behalf of the policyholder, not the insurance company, to help the policyholder navigate the claims process and obtain a fair settlement.
Frequently asked questions
With the inherent complexity of insurance claims, several questions can arise at various stages of the process. These may include:
The takeaway
A natural disaster is a difficult situation in many ways, and recovering losses and returning to normalcy as quickly as possible are of paramount importance. Knowing who is involved in the processing of an insurance claim and how the parties work together allows you to focus on what matters most: bringing your business back into operation.
See how our business insurance claims services can help you get back to business
