With the curfew in Baltimore now lifted, and the riots behind us, many local small businesses should now be filing insurance claims to rebuild what they have lost.
Some businesses will file claims for theft as the result of looting. Others will file claims for damage done to their property by fire or other vandalism. Still more will file claims for loss of income as the result of the protests, police barricades, closed streets and especially the mandatory curfew.
Hopefully the majority of the businesses impacted by the events surrounding the death of Freddie Gray will have previously purchased comprehensive insurance policies to cover their property damage as well as lost income stemming from the nearly week-long curfew. My best advice to all of these businesses, which I shared with reporters from The Baltimore Sun and the Baltimore Business Journal, is to file your claims right away, if you haven’t already. Waiting only allows a claims adjuster to question whether certain claims are directly attributable to this week’s events.
Even for businesses that escaped the riots and curfew unscathed, the Baltimore scenario should serve as a warning that it’s time to review your insurance policy, particularly if you haven’t done so in a while. Or, if you haven’t purchased insurance at all, perhaps these events will give you the motivation to do so.
The three most important things to remember are to understand what your insurance policy covers, make sure it covers everything it needs to cover if tragedy were to strike, and get your documentation in order so that your records can provide all the proof you may need to get your claims paid.
Start with a call to your insurance agent and a thorough read-through of your current policy. Most policies cover fire, floods, acts of vandalism, and theft. High-end policies will also include business interruption insurance, which can also be purchased as an add-on to a less-expensive policy. This is what you need to cover loss of income resulting from events like the curfew, which forced many restaurants and bars to close before their usual prime-time hours.
Once you’ve reviewed your policy, consider whether the coverage you have still meets your needs. After all, many businesses grow over time. They add employees, buy new equipment, make improvements. If your business recently renovated and added a modern new flooring system, does your insurance policy still only cover the cost of a linoleum replacement? Businesses should reassess their insurance limits once a year to make sure they cover all the equipment they might need to replace, as well as the time it will take to get the business up and running again following a catastrophic event.
The next step is to document everything – take photographs of all your fixtures and equipment; make copies of all your warranties, invoices, and any records that prove how much revenue your business earns. Preferably, keep five-years’ worth of records. If you purchased new computers and printers last year, you should have photographs of all of it.
Once you have this documentation, contemplate where to keep it. Don’t put your only copy in a desk drawer or an office safe. Store it in the cloud or on an off-site server — or in your mother’s house. A file of photographs of your equipment won’t help you if it is destroyed in a fire. But make sure the records are readily accessible so that you can hand it off to your insurance company as quickly as possible after filing a claim.
Keep in mind, if an insurance company gets a hundred claims following a catastrophic event, the first to be paid will be the claims that are filed early and that provide the most complete information up front. The claims that come in late or with incomplete records stand the highest chance of being delayed or denied.
If you would like to discuss any of these issues further, please contact Alex J. Brown, Esq., a partner at Shapiro, Sher, Guinot & Sandler, at 410-385-4220, or by email at firstname.lastname@example.org.