A company restored its manufacturing facility within three months of a major fire loss, but it took six months for the firm to return to its preloss sales volume. The business interruption loss sustained during the fourth, fifth and sixth months following the reopening was not covered. This is not an unusual situation in that policies normally provide coverage only for a reasonable restoration period. However, companies can protect themselves by adding extended period of indemnity coverage to their policy. Heard enough? Unfortunately, most of these are not “happy ending” stories. But they are valuable in demonstrating some of the unexpected things that can and do happen to companies as a result of catastrophes.
Now, in a more positive vein, let’s look at some of the things you can do to help minimize your company’s exposure. We’ll begin by examining the first process you should undertake — preloss planning. Following that, we’ll review several important, general postloss considerations, including a number which relate specifically to the insurance claim process.
First of all, select a competent broker or risk consultant—one who understands your business vulnerabilities, who’s in touch with your growth, and with whom you can communicate. Make an effort to help him/her understand your business, so you can work together to identify possible exposures and solutions.