UNDERSTANDING COMMERCIAL PROPERTY DAMAGE CLAIMS
Commercial property insurance and the losses that may follow come in many types and forms. As an example, a loss to a condominium association building’s common area (the building versus the unit owner’s property) in Florida is considered to be a commercial loss. Therefore, not all commercial losses center on business, trade or commerce alone.
Generally, commercial businesses have their own unique policies and endorsements that in some cases are structured for their specific needs. These policies are often referred to as “manuscript policies.” As a result, losses to a business can and often involve very significant issues and challenges that are time consuming and require a trained professional’s effort. Management’s first and most important job is to resume business operations and get the business up and running. A professional public adjuster should be retained at the very on-set of a loss allowing management to focus on issues that will restore the operations of the business.
Insurance companies typically have their most experienced claims adjusters working on commercial claims because they can be so complex. That could put you at a disadvantage if you do not have a public adjuster representing your best interest and helping you with your recovery decisions with issues such as damage mitigation and business interruption claims. While you are attending to getting your business operating, we are protecting the complicated issues surrounding your insurance claim.
For the most part commercial business and their management staff have a somewhat higher level of sophistication in insurance matters. Brokers are often retained to structure specific programs that cater to commercial business insurance needs. In larger corporations, it is not unusual to see in-house risk managers employed to keep track of insurance coverage given an ever changing risk profile due to new products or business plans. Risk manager’s responsibility can be as broad as to indentify and plan for all types of risk including property insurance, exposure for third party liability issues, and loss of income and business interruption coverage.
The types and issues that come up in commercial loss are incalculable. As stated above, the types of policies and coverage vary, so each loss has its own unique problems that must be worked through. Over the years we have seen certain general practices and procedures that always seem to turn up in commercial claims that if not planned for and dealt with properly could create bad results.
The deductible issues can also be confusing because most adjusters will apply the deductible to the payment they want to give you. Read your policy to determine if your deductible may be applied off the entire loss. This can make a big difference in the net payment you will receive.
Commercial losses typically are not total losses and while the stock and equipment cannot be sold as planned, they may have significant salvage value. If your insurance company pays you for the cost of damaged stock, does that give them the right to take the salvage, sell it and pocket the difference after the salvage company takes their cut? Not necessarily, as a number of issues are involved in this process. First, are your losses in excess of your coverage? If so, you may be entitled to salvage recovery money. Also an agreement needs to be reached between the insurance company, your professional public adjuster and the salvage company on what the net amount may be after cost. It’s important to know this number. Many claims have been settled where the insured is allowed to keep salvage as a trade-off for a somewhat reduced total loss payment.