How to Avoid Insurance Claims Process Quicksand
“Quick, send us your detailed business personal property (BPP) list.”
“We just need a detailed list of all your building contents, including furniture, fixtures, computer equipment, manufacturing equipment, inventory, raw materials—any material or item that isn’t part of your building that you need to run your business.”
“Oh, and we need the date you purchased it, a description of the item, and it’s projected replacement cost. And proof that you had it…”
Your BPP is Critical after a Disaster
In our recent four expert tips for smoother insurance claims post, we discussed the importance of keeping detailed, organized business records for the claims process. Your BPP list is a case in point.
After a disaster, insurance companies require that you prove your losses, and a detailed BPP list can make all the difference for quickly getting the check that will allow you to start refurbishing your business and replacing inventory. Without one, you may end up waiting days or weeks for people to fish through damaged records and debris and piece together a claim. And the costs of waiting can be devastating to the bottom line or even the life of your business.
Don’t Panic. Prepare for a Faster Recovery.
Keeping your BPP list up to date is just smart business. If your business hasn’t done a good job of keeping track of purchases in the past, be sure to start as soon as possible. And then make a schedule to fill in past purchases starting with business-critical assets and continuing to add less-important items until you are caught up.
At a minimum, your BPP list should include the following details for any asset important to running your business and generating income:
- Purchase date
- Purchase cost
- Description of item
Keep up-to-date photos on hand
In addition to your BPP list, it’s a good idea to regularly photograph all of the areas of your business so your insurance adjustor can get a good idea of the pre-loss state of your facilities and verify that you have the equipment and resources on your BPP list.
In fact, if you don’t have a good BPP list now, take photographs first. That way you’ll at least have the photos to work from, if a disaster hit before you finished your list (see the “Waiting…?” section to understand why it’s best not to wait).
Streamline the Process with Bar Coding and an Asset Management System
Depending on the type and size of your business, it may even make sense to employ technology, such as bar codes or radio frequency ID (RFID) chips or an asset management system. That way it’s easy to keep a constant account of property that you can easily access for insurance purposes.
Waiting to Get More Established or Less Busy? Consider This…
We’ve seen a lot of unfortunate situations and take it from us—it’s never too early to start your list.
For example, Interstate responded to a storm surge event that devastated the first floor of a newly remodeled and refurnished resort hotel. The wave totaled the main kitchen, a ballroom, the lobby area and retail shops. Since the remodel had just been completed and many of the items in the hotel had been bought in bulk orders, the record keeping was limited. Figuring out the losses took approximately 60 days of work by salvage experts. And while some parts of the hotel stayed open during the time, many key revenue-generating areas were offline.
So be sure to ask yourself: “How long could we afford to be offline before it becomes a serious issue?” And then use the answer as inspiration for completing your BPP list in a timely manner.