Property Claims Quarterback
Managing a Complex Property Damage
and Business Interruption Claim
Atlanta RIMS Educational Conference
February 10, 2011
Introductions
Hunter Williams
HunterWilliams@Dempsey-Partners.com
404-220-9000
Chris Dineen
ChrisDineen@Dempsey-Partners.com
312-328-1000
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Presentation Overview
• The Players: Roles & Responsibilities
• Game Planning: Managing Expectations
• Kick-Off: What Should you be Doing?
• Playbook: Valuation
• 4th Quarter: Settlement
• Post Game Interview
• Monday Morning Quarterback
• Questions and Answers
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The Players
Claim Adjuster Risk Manager
Goal: Prove Actual Loss Goal: Expedite and
Sustained Optimize Recovery
Internal Internal
• Account Executive •CEO / CFO •Operations
• Underwriter •Legal •Sales & Mktg.
• Reinsurers •Accounting
Third Party Third Party
• Engineers •Contractors
• Claim Auditors •Forensic Accountants
• Construction Consultant •Coverage Counsel
• Coverage Attorney •Broker
“Keys to the Game” “Keys to the Game”
• Adjusting the Claim •Safety of Employees
• Substantiating Loss •Restoring Business
• Mitigation Activities •Mitigating Loss
• Restoring Operations •Insurance Recovery
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The Players
Adjustment Policyholder
Risk Manager
Team Team
Adjustor Risk Manager
Construction
Auditor Engineer Internal External
Expert
Sales/ Forensic Construction/
Operations Treasurer/CFO Legal Broker
Marketing Accountant OEM
Accounting Coverage
Department Counsel
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Game Planning: Managing
Expectations
• Claims are a series of Expectations that need to be
managed
• CEO/CFO - “Do we have enough coverage, and
when are we going to get paid”
• Plant Manager - “When can we replace our damaged
equipment”
• Adjustor - “I need to set a reserve by Friday”
• Controller - “When are we going to get an Advance”
• Broker - “Our renewal is in two months and we need
to firm the claim up to successfully market the
program”
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Game Planning: How to Manage
Expectations
• Understand your Insurance Policy - You are the company
insurance expert
• Identify an Adjustor you have a comfort level with and have
them written into your policy
• Develop procedures and protocols for your business units to
refer to in the immediate aftermath of a loss
• Use the Value collection process as a means of educating
colleagues on Property Damage & Business Interruption
Coverage
• Understand the key issues, and develop timelines to enable all
parties to meet expectations
• Setup a Claim’s Team beforehand - Interviewing experts
ahead of time will enable you to think through the process and
set protocols
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Game Planning: Understanding Your
Policy
• Covered Perils - Triggers
• Covered Property
• Physical Damage
• Business Interruption - Loss of Use
• Supply Chain Coverage - No Requirement of Physical Damage
• Additional Perils:
– Service or Utility Interruption
– Loss of Ingress/Egress
– Mandatory Evacuation/Civil Authority
– Contingent Business Interruption
• Exclusions:
– Flood, Surface Water in some territories
– Pollution, Mold
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Kick-Off: What Should you be Doing?
• Report Claim - Put Carrier on Notice (RM)
• Identify Business Impact (Team)
• Mitigate Loss (Team)
• Document Everything (Team)
• Assemble Claim Team / Assign Responsibility
(RM)
• Open Communication Lines (RM)
• Calculate Preliminary Loss Estimate (Team)
• Drive the Process (RM)
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Playbook: Valuation
• Property Damage
– Actual Cash Value vs. Replacement Cost
– Repair versus Replace
– Internal Labor
• Business Interruption
• Contingent Business Interruption
• Extra Expense
• Expediting Expense
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Playbook: Business Interruption
• Property Damage Drives Business Interruption
– Period of Restoration
– Extended Period of Indemnity
– Expediting Expense
– Partial Impairment of Operations
• Projected Sales and Profit
• Ability to Make Up Sales
• Ordinary Payroll
• Business Interruption v. Mitigating Expense
– Outsourcing Critical Functions
– Incremental Costs: Logistics, Marketing, Advertising
– Discounts to Retain Market Share
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4th Quarter: Settlement
• It’s a Negotiation
– Understand your Claim
– Understand Key Issues
– Understand Arguments for and Against the
Key Issues
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Post Game Interviews
• Lessons Learned in The Claim Process
– Inadequate Pre-Loss Preparation
– Communicating Facts and Methodologies?
– Working Together Toward Resolution?
– Meeting Management Expectations?
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Monday Morning Quarterback
• Using Lessons Learned
– Can the Process be Improved on the Next Claim?
– Did Recovery Match the Coverage?
– Does this event Change How We Look at Coverage?
– Do We Designate Individuals or Companies in the Policy?
– What is your Insurer Prepared to do?
• Business Interruption Values & Exposures
– Quantification of Business Interruption Risks
– Analysis of Specific Facility or Division Exposures
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Questions?
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Thank You for Attending!
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