While much attention will be paid to the loss of property—in many cases whole structures were blown apart—businesses in the immediate area, from tourist destinations, to citrus growers, to defense companies, also will need to account for business interruption losses and recovery costs. For example, losses related to the inability to enter property as a result of emergency decrees by government officials (Civil Authority coverage), or those that are attributable to a loss of utilities (i.e. spoilage due to a lack of power), may need to be taken into consideration.

Those businesses not directly in Hurricane Charlie's strike zone, but engaged in business with affected companies in Florida, should closely review supply chain or other operational impacts and their policy coverages, as they too may be eligible to file claims with their insurers.

In the wake of Hurricane Charley, executives should be asking several questions to gauge their organizations' ability to handle related insurance claims such as:

• Do our property policies cover us if we have a claim?
• How should we adequately capture, manage, and report damages?
• Have we established accounting and technical protocols to accurately measure and track the extent of our losses?
• Have we accurately accounted for all business interruption losses and recovery costs?
• How should we present our claims to ensure the maximum recovery from insurers?
• If we cannot recover insurance claims, how can we recoup losses, i.e. FEMA?
• Do we have the expertise and experience required to prepare, file, and negotiate our claim?

In the first instance, organizations should review their policies and coverage with their broker or agent, and work to determine what aspects of the loss are covered, as well as the documentation required by insurers. Coverage areas may include: property damage including spoilage, business interruption, extra expense or other time element losses, such as service-interruption/off-premises power, civil authority, and ingress/egress. An evaluation and understanding of coverage, deductibles and triggers, as well as filing requirements, are critical in expediting the claims recovery process and any discussions with insurers.



Despite thousands of utility employees working 12- to 16-hour shifts, power executives made official Sunday what many observers had predicted since Charley hit Friday: A week or more likely will pass before everyone gets the lights back.
Orlando Sentinal, 8/16/2004

Once it is safe to reach affected areas, organizations should begin to assess the losses incurred. Using advisors, particularly forensic accountants and ones with construction expertise, organizations should seek to measure and document all aspects of property damage, business interruption, and extra expense damages. At the same time, if they have not already, they should establish processes and accounting protocols to track loss-related costs and expenditures. Engaging in such a rigorous process will allow organizations to determine initial damage estimates, and lay the groundwork for more detailed loss measurement and recovery.

It is vital that organizations take the time to engage in a full review of their policies, and agree with their insurers on a detailed loss management plan, so that they can maximize the possibility of a full recovery with their insurers.

Though no one can predict with complete accuracy when, where, and with what force a hurricane will hit, businesses should be ready to account for losses that occur when a storm like Hurricane Charley strikes, so they can move quickly to recover and begin business as usual.

If you have any questions or would like additional information, please contact us.