In the book Business Interruption: Coverage, Claims and Recovery, the authors devote a section to discuss relevant issues surrounding the presentation of reports and data in support of a business income claim. We live in a world where information is being stored in “clouds;” knowing exactly how to gather, collect and present business data after a loss or catastrophe is likely the best practice to avoid unnecessary delays and obstacles during the claims process.
Today, high-speed computer networks and Internet access are considered to be as essential as indoor plumbing. We have access to what seems like limitless data and information. Company computer systems house terabytes of financial information that is sliced into countless management and financial reports that executives use to efficiently run and guide their business
Easy access to all of this information can be good or bad for business interruption claims as it can 1) assist in speeding the insurance claims process to an agreeable settlement, or 2) mire the process in unnecessary data that slows progress, contributes to countless questions and requests from insurer representatives, and increases scrutiny regarding the amounts being claimed.
Businesses should always be prepared for a loss. Maintaining and organizing financial information is as important as developing an emergency plan that is implemented in moments of panic. To that extent, insureds should consider pulling all the necessary and relevant financial data in a “mock” emergency to determine whether their information systems could be improved.
The authors emphasize that
The insured must commit the necessary resources to gathering, interpreting and explaining the documentation that is relevant to the claim. Modern accounting and information systems have the ability to store and produce an avalanche of data, and providing this volume without proper context can lead to a prolonged period before settlement can be reached.
Custom accounting reports and their corresponding supporting data for review by the insurers are typically ineffective without a summary of the entire claim that tells the story of the loss to the organization. The organization should use spreadsheet tools to assimilate the large quantity of supporting data into a set of claim schedules that build up, almost pyramid-like, into summary schedules by primary claim categories that insurers can review easily.
Today’s claim adjuster can work multiple loss files in a remote location while accessing vast volumes of information forwarded from claimants to adjusters via email and online secure working environments such as eRooms. These techniques allow the insured tp efficiently update insurance claim data and share relevant information with insurer representatives.
Insureds should use all technological resources available to collect and organize financial data and have information systems that generate strong reports which tell a story and go beyond the numbers. For example, maintaining data in advance that correlates to the various coverages purchased (i.e., net income, normal operating expenses and payroll, electronic inventories for business personal property, etc.) should save precious time when it is needed the most.