Issue link: https://read.dmtmag.com/i/244294
[ Prepare for the inconceivable ] "We're kind of a destination place, it's not like the coast where people are passing by all the time. You have to want to come here, so that's been the hardest part of recovery." — Russ Cranford, marina manager, Alred Marina diately began taking pictures of the damage and working to contain oil slicks in the water. Cranford took issue with his insurance company's response after the fact, as the structural engineer it sent had no marina experience. After seeing his initial report, which he said included significant inaccuracies and undervalued the cost of the repairs, Cranford hired a professional loss consultant to represent his interests with his insurance provider. The initial insurance settlement offer was between $1.5 and $1.6 million. Upon hiring Keith Hayman, a catastrophe team specialist at GGG/Adjusters International, Cranford no longer had to deal with his insurance company personally. Hayman handled all communication from that point as he negotiated a better offer for the business. The hire paid off, as Hayman was able to increase the final settlement by approximately $750,000. That additional money allowed Alred to rebuild its docks and begin a marketing campaign to attract additional customers to its new docks. Alred Marina also lost money through its business interruption insurance, which insured the business for up to 30 days in the event of an incident that prevented the company from operating. By coinsuring a portion of the loss, as well as underestimating its business income on the policy, the business incurred a penalty and only received 59 percent of its business loss. "The biggest deal is just trying to stay in touch with your customers and make sure you're insured properly," Cranford said. "Everybody can be insured, you've got to be insured properly, that's the key." Massive tornado damage at Alred Marina in the wake of one of the largest tornado outbreaks ever recorded. www.BoatingIndustry.com P26x31-BI14FEB-Disaster-dv.indd 31 WHEN TO HIRE A PROFESSIONAL LOSS CONSULTANT Alred Marina's journey through the insurance claim process, along with the stories of Legendary Marine and Seattle Boat Company, illuminates the burden that falls to business owners trying to rebuild after a disaster. Few business owners are well read in the minutiae of commercial insurance policies. To understand what can be done in advance, we spoke with Keith Hayman, a professional loss consultant from GGG/Adjusters International who guided Alred Marina's claim through the process. Given their steep cost, Hayman suggests that business owners should consider the service of a loss consultant when a claim exceeds $50,000. He added that many insurance professionals have begun to expect the addition of loss consultants to major claims, as it's often in their best interest. "Then they realize they're going to have to pay what they're supposed to pay on the claim," he said. "They try to deter their policy holders from hiring us, but it's their right … it's actually the insured's right to be able to hire an advocate." In business claims where totals can easily exceed $1 million, Hayman likens the situation to a large, complex business deal where most people aren't comfortable or familiar with the process. Professional loss consultants often cost 10 percent or less of the total claim, which can vary by situation. Hayman suggests business owners hire a loss consultant immediately in the event of a large-scale disaster. He added that insurance companies often underestimate labor and materials costs, which can spike in the aftermath of a large-scale disaster like Hurricane Sandy, as well as things like overhead and profit that some policy holders can be entitled to. Aside from taking photos of your facility and storing them in the cloud before any disaster strikes, Hayman also advises business owners to keep and review the full copies of their insurance policies to make sure they understand their coverage before it's too late. "Review your coverage and make sure you're adequately covered because business income changes each year, valuations of boats change each year," he said. "If you own your building, valuation of your business and the cost of construction changes." Hayman recommends exploring coverage with an extended period of indemnity, which provides assistance after the date of restoration as a business slowly regains its momentum. Such periods are often 60, 90 or 180 days, which is an area where Hayman said insurance companies will often dispute. He also suggests business owners conduct regular inventories, and keep facilities maintenance records so insurance providers can't argue a pre-existing condition with the building or grounds. February 2014 | Boating Industry | 31 1/8/14 12:50 PM