Disaster Recovery Documentation: Categorizing Losses
The third issue of Disaster Recovery Today focuses on disaster recovery documentation and specifically the procedures for categorizing losses using the required FEMA categories. This article, "Categorizing Losses," outlines the third step of a nine-step process identified by Adjusters International to respond to a declared disaster with disaster recovery procedures that will ensure a successful financial recovery.
Following a major disaster, categorizing losses must be accurately performed to avoid future conflicts with FEMA. Proper disaster recovery documentation is critical to the process. Understanding FEMA’s guidelines and disaster recovery procedures is paramount to success. For example, losses will need to be categorized into prescribed FEMA categories. These categories are separated into two sections: Emergency Work (Categories A & B) and Permanent Work (Categories C through G).
The primary difference between emergency and permanent work involves the reimbursement for an agency’s employees (force account) for eligible disaster-related work. FEMA only reimburses for overtime under categories A & B; whereas the remaining categories are reimbursed for both straight time and overtime. It is important to keep these categories in mind when you begin your documentation procedures as oftentimes it will take several weeks – sometimes months – before a disaster is declared as eligible and FEMA is actually on site.
Business continuity planning (BCP) is the creation and validation of a practiced logistical plan for how an organization will recover and restore partially or completely interrupted critical (urgent) functions within a predetermined time after a disaster or extended disruption. The logistical plan is called a business continuity plan.
In plain language, BCP is working out how to stay in business in the event of disaster. Incidents include local incidents like building fires, regional incidents like earthquakes, or national incidents like pandemic illnesses. Wikipedia
The focus of this issue on categorizing losses is to define and discuss each FEMA category in an effort to provide a snapshot of how FEMA views and approaches disaster recovery documentation and disaster recovery procedures.
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Adjusting Today is provided free of charge as a public service by Adjusters International, Inc., disaster recovery consultants. It is provided for general information and is not intended to replace professional insurance, legal and/or financial advice for specific cases.
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