Blogger: Lee M. Epstein
Beyond the personal toll extracted by Hurricanes Harvey and Irma, the property and business losses are projected to be among the greatest caused by a natural disaster. As the recovery efforts continue in earnest, the following Checklist is offered to assist those who have suffered a loss and are planning to submit an insurance claim for any property loss and business interruption suffered.
□ Restore service to any property protection systems that have been damaged, such as
sprinklers and alarms
□ If property protection cannot be restored, post a watch
□ Notify all insurance companies whose policies may be implicated
□ Consider whether notice should be given to excess insurance companies or to
insurance companies whose policies have expired
□ Prepare a preliminary report describing:
□ The type of loss
□ The date and time of the loss
□ The location of the loss
□ A contact person at the company
□ The property involved, including: buildings, equipment and stock
□ Determine if:
□ The property is protected from further damage
□ Any buildings require temporary enclosures
□ Any utility lines have been damaged and require repairs
□ Identify and separate damaged and undamaged property
□ Commence salvage operations
□ Determine whether:
□ Production can be restored at the damaged facilities
□ Damaged equipment can be repaired
□ Substitute facilities and equipment are available and necessary
□ Lost production can be made up through inventory, overtime, or other
□ Formulate a plan with the insurance company’s input for making repairs,
securing substitute facilities and equipment and undertaking other loss
□ Set up accounting procedures to track:
□ Property Damage
□ Create separate accounts for all loss-related expenses
□ Implement procedures for collecting and maintaining all loss-related
documentation in accordance with insurance policy terms, including
invoices, contracts and manpower hours
□ Inventory damaged and undamaged goods
□ Business Interruption
□ Determine the “period of interruption”
□ Determine the quantity of lost production as reflected in inventory
records, production records and sales records. Compute what the business
would have normally produced, had there been no loss, then see how many
units were actually produced. The difference is the gross lost production.
□ Deduct any sales or production that can be continued or made up through
the use of existing inventory, the utilization of other plants, the utilization
of overtime hours or other loss mitigation efforts. The difference is the
net lost production.
□ Multiply the net lost production by the marginal value of a single
□ Add back the extra costs associated with replenishing inventory and loss
□ Prepare and submit claim
□ Date, location and type of loss
□ Amount claimed
□ Break down the amount claimed
□ Property damage
□ Real property
□ Stock and supplies
□ Demolition and debris removal
□ Business Interruption
□ Interruption Period
□ Sales value of lost production
□ Expenses incurred to reduce the loss
□ Attach supporting documentation for each element of the property damage and
□ Press for written extensions of time to submit claim and to file suit if necessary
□ Seek prompt payment of claim by insurance company
□ If a dispute over a claim arises, determine
□ Whether appraisal is appropriate or beneficial
□ Whether litigation will expedite payment of claim
For more information, please contact Lee M. Epstein, Weisbrod Matteis & Copley PLLC
I, and several colleagues, recently had the good fortune of joining the law firm of Weisbrod Matteis & Copley (“WMC”) and opening its first office based outside of Washington, D.C. in Philadelphia, PA. In addition to representing corporate policyholders in maximizing insurance recoveries, WMC is one of the leading firms in the country representing individuals who have been left high and dry by their insurers after a major disaster, such as Hurricane Katrina or Superstorm Sandy, strikes.
For nearly ten years, the firm has represented the whistleblowers who first discovered fraudulent engineering reports after Hurricane Katrina. It remains the only firm in history to prove to a jury that a FEMA-contracted insurer committed fraud in adjusting Hurricane Katrina claims.
WMC is now bringing that experience to bear for the benefit of home and business owners who continue to suffer so greatly in the aftermath of Superstorm Sandy. The firm represents nearly 1300 Sandy victims who are seeking a fair adjustment of their flood insurance claims by FEMA. Unfortunately, that adjustment process is rife with fraud.
On the positive side, both congress and the media are taking note. Recently, WMC partner, August Matteis, appeared on a television news segment along with Congressman Tom MacArthur to discuss the fraud. You can view that segment by clicking here. Most recently, Matthew Krauss, another WMC attorney, appeared on Maggie Glynn’s radio show to further explain how Sandy victims are being underpaid. That interview can be heard by clicking here.
Victims of natural disasters have suffered enough. If nothing else, FEMA owes them an honest adjustment of their insurance claims.
For more information, please contact Lee M. Epstein.
Insurance is everywhere; it is intertwined with every facet of our working and personal lives. Yet, all too often when a loss occurs or a liability is sustained, we fail to obtain the full protection that insurance promises to provide. Many times this failure is simply the result of not looking in the right place or not looking at all.
In an extreme example, coverage was found under a client’s umbrella homeowner’s policy for the costs of defending a lawsuit involving a will contest. In that case, our client was sued by his brother who claimed that he was wrongly cut out of their mother’s will. After being told he had no insurance for the substantial costs incurred in defending the will contest lawsuit, our client contacted us for a second opinion. As it turned out, our client’s umbrella homeowner’s policy provided coverage for “personal injury,” defined to include certain intentional torts, including “misrepresentation.” The will contest complaint alleged, in part, that our client had failed to disclose that their mother had cut his brother out of her will. That single allegation was enough to cause the court to conclude that there was the potential for coverage and, thus, a duty on the part of the insurer to reimburse the costs incurred in defending the will contest lawsuit.
Had our client simply accepted the initial opinion of no coverage, he would have forfeited over a half million dollar recovery. By seeking a second opinion and allowing us to look for coverage under the umbrella policy, a potentially crippling loss was averted.
It would be easy to dismiss this insurance success story as novel; it is not. Everyday, individuals and businesses confront similar claims. All too frequently these claims go uninsured, not because of the lack of insurance coverage, but because insureds fail to look in all the right places for that coverage.
Questions? Contact Lee Epstein at Weisbrod Matteis & Copley PLLC.