What happens when a natural disaster damages your business property? What if floodwaters drench your equipment? Are you prepared for scenarios like these?
Thinking about catastrophic outcomes is not fun. However, having a strong recovery plan in place will be helpful in the event of a natural or human-made disaster.
One of the ways you can prepare is to understand how business property damage is estimated. Here we break down everything you need to know about damage estimates. If you want to know how insurers assess business property damage, keep reading.
Business Property Damage Estimate Process
As soon as your business property is damaged, contact your insurance provider immediately. Then, when it is safe to do so, take pictures of the damage. Doing this will help you in filing your insurance claim.
Next, your insurer or contractor will begin doing work to prevent further damage. Also, during this process, they will gauge how extensive the damage is. This will help them estimate costs and move the claim process along. Here are some of the property damage assessment considerations:
Lost Inventory and Stock
In preparing for the event of a disaster, talk to your insurance company about stock and inventory. Communicate its value — replacement cost, sales, how much it’s worth — and whether you or the insurer would be responsible for the damaged stock.
For damaged stock and inventory, your insurance company will ask for business records to determine how much inventory there was at the time of the loss. This is why it’s crucial to digitalize all business records, so they’re not lost or damaged.
If your inventory is damaged, assess whether repackaging is necessary. Often the item itself isn’t damaged, but the packaging is.
Also, consider the replacement cost of the inventory. Does it differ from the original purchase price?
Equipment refers to things that can not easily be moved from the vicinity. These include things like X-ray equipment, CAT scanners, commercial kitchen appliances, and other large and bulky items. The following is considered when assessing equipment damage:
Can the machinery be repaired or replaced? You may not know if the item can be replaced or how much it would cost to repair. If this is the case, consult with an engineer or the equipment manufacturer.
Damaged Buildings or Personal Property
When estimating the damage to a building, your insurance company will consider the following:
Is the building safe and in agreeance with building codes? If the damage has made the building unsafe for occupants, then construction and rebuilding will need to take place.
Can the damaged personal property be replaced, or does it need to be repaired? Things like furniture will need to be replaced. Other items like books will need to be tested to determine if they can be salvaged. Things like computers may need to be repaired.
What Will You Do When Disaster Strikes?
Knowing the damage estimate process alleviates stress during difficult times. It doesn’t hurt to have a solid recovery plan in place either. If you need assistance preparing for a catastrophic event, request a consultation.