Please consider first this checklist:

  • Immediately call your insurance broker and your insurance company. Give notice under any and all policies.
  • Record the damage — photograph as much as possible, video too if you can.
  • Try to preserve all records that may be important later to document the loss.
  • Attempt to protect property from further loss or damage (if possible); remember that mold can form and may be excluded under insurance policies.
  • Separate damaged from undamaged property (if or when possible).
  • Do not provide the insurer with a signed and sworn proof of loss until you have spoken to your insurance broker or lawyer. You should usually provide proof of loss within 90 days; if you need an extension, you must request one and the insurer must grant it in writing.
  • Keep a record of all expenses necessarily incurred to protect the covered property.
  • Are you a landlord or tenant? Know what obligations or rights you have under leases.
  • If you have suppliers, are you insured under their policies? Be sure you have certificates of insurance from someone else that might provide you with coverage.

In Hurricane Sandy’s aftermath, many of our clients face overwhelming challenges in trying to get their lives and businesses back to normal as quickly and as seamlessly as possible. They will look to their insurers to help them overcome these challenges. Often, the decisions made during the days immediately following a catastrophic event like Hurricane Sandy can be critical. Here are some of the key issues that clients should consider in their loss-mitigation efforts:

Property Damage

  • Give immediate notice to insurers and your insurance broker. Your broker should step up and help with any losses.
  • If you have water damage, can you salvage any of your property?
  • Try to determine if water damage was wind-driven water which should be covered even if you don’t have flood insurance.
  • Document your loss in as detailed a fashion as possible before submitting an insurance claim. In particular, take extensive photographs and compile a detailed description of all damaged property that you can provide to your insurer or the adjuster sent by your insurer to asses and inspect your damage.
  • If you were forced to relocate from your home or business, keep receipts for all relocation or extra expenses, as these may be covered under your property/homeowners policy.
  • Do not move or dispose of any damaged items until you have been visited by an insurance company adjuster.

Business Interruption Loss

  • It is quite possible that Hurricane Sandy caused an interruption to your business operations that resulted in lost income for your business.
  • Business interruption loss, in the traditional sense, is lost income that results when business operations are interrupted by an event such as a natural disaster.
  • It is important to consult with your insurance broker to determine whether and to what degree you have insurance that may cover this type of business interruption loss.
  • If possible, set aside the damaged property in the best possible order for the insurer to examine.
  • Permit the insurer to inspect the property as often as it reasonably requires, including relevant books and records.
  • If you intend to continue the business, you should resume all or part of previously-occurring business activities on the premises as soon as possible.
  • Even if you have insurance coverage for this type of traditional business interruption loss, it is important that you understand the terms and conditions of your coverage.
    • For example, many policies will require that a business owner take steps to mitigate income loss, such as re-opening in a limited fashion, as a condition of receiving business interruption coverage.
    • Additionally, some business interruption insurance may provide limited coverage or no coverage for repairs made in order to get a business up and running.

Contingent Business Interruption Loss

  • Hurricane Sandy may have also caused you to suffer a contingent business interruption loss.
  • A contingent business interruption loss is a loss that a business suffers as a result of damage to other property that prevents one of the suppliers from providing goods and/or services to the business, or that prevents the business’ customers from accepting goods and/or services from the business.
  • Consult with your insurance broker to determine the extent to which you have insurance that may cover contingent business loss.
  • Even if you do not have contingent business interruption coverage, it is important that you consider every potential impact that Hurricane Sandy may have on your operations.
    • Although your business’ operations are not directly affected, one or more of your key suppliers or distributors may have had their operations affected by Hurricane Sandy, resulting in a disruption of your supply chain.
    • If your supply chain has been disrupted, now is the time to consider alternative arrangements that can be made to mitigate the effects of this disruption.

Electronic Data Loss/Data Security

  • Most business records are stored electronically in some fashion. These electronic records can often include confidential customer information, such as credit card information, address and telephone number, and/or password information.
  • It is important to assess whether Hurricane Sandy caused physical damage to the location where your business’ electronic records are housed, as well as whether Hurricane Sandy has left your business’ electronic records vulnerable to a cyber attack.
  • You will also want to determine whether you have insurance that may cover any type of electronic data-related loss.