Catastrophic Claims Preparation & Recovery Guidelines

NOAA’s Climate Prediction Center is predicting another above-normal Atlantic hurricane season for 2021. A likely range of 13 to 20 named storms and a possibility of 3 to 5 major hurricanes (category 3, 4 or 5; with winds of 111 mph or higher) is expected.

Be prepared for the next storm.

Preparation in advance of a catastrophic event will make the insurance claims process easier to navigate, as well as help organizations resolve third party or contractual claims caused by a significant loss. Additionally, establishing a loss response plan to activate after a catastrophic event is critical to achieving a successful recovery. Imperium’s team of experts suggest the following preparedness guidelines to help:

Catastrophic Claims Preparation & Recovery Best Practices: (Download PDF)

  1. Review your loss recovery plan (or this checklist).
  2. Identify and review all relevant insurance policies.
  3. Review business continuity plans.
  4. Safeguard important financial records either by removing them from the site, saving to an offsite storage location, or cloud based platform.
  5. Take steps to protect and secure physical assets, property and equipment.
  6. Update inventory lists, asset registers, and stored materials logs to ensure currency.
  7. Notify the Loss Recovery Team members to anticipate activation and to be prepared to assess the overall organizational impacts, including: property damage, repair and loss mitigation needs, staffing, and business interruption. A Team Leader should be appointed to serve as the liaison between organizational functions, such as: risk management/insurance, financial, legal, operations, facilities, security, information technology, and outside advisers/consultants, among other relevant departments.
  8. Set up dedicated loss and recovery cost accounts to track all costs related to the preparation of the event. Ensure appropriate operations and accounting personnel have instructions regarding approval and documentation protocols regarding loss-related expenses.
  9. Keep detailed records of employee labor and expenses related to safeguarding, protection and general preparation for the event. Document the hours worked by task, track straight time and premium time distinctly, and include a description of the work performed.
  10. If possible, take pre-event video and/ or pictures of property and equipment, inside and outside. For active capital projects, major maintenance, and other construction, document the status of work completed just prior to the event in terms of cost incurred and progress achieved against a completion schedule.
  11. As appropriate, evacuate employees and activate communication protocols to account for employees after an event and to keep them informed.

After the Event / Post-Loss Guidelines:

In the event of significant damage to and/ or interruption of the business, the following post-loss guidelines will assist with the claims recovery process:

  1. Secure and ensure safety of employees / colleagues.
  2. Activate Loss Recovery Team, which should include as appropriate:
    • Dedicated Team Leader;
    • Risk Manager and financial department colleagues (CFO/Controller);
    • Accounting staff;
    • Facilities management;
    • Outside broker;
    • Forensic accounting / claim preparation consultant; and
    • Construction cost and schedule consultant.
    • Identify, photograph, and document the scope of the loss while preserving any damaged items.
  3. Develop scope of repair estimates with vendors or internally.
  4. Implement claim cost tracking and accounting protocols.
  5. Implement document gathering protocols for property damage and business interruption.
  6. Track and document customer inquiries, cancelled orders, potential delayed events that drive revenue generation or create added cost, and other lost sales or loss event costs.
  7. Communicate with broker, consultant, carrier, and adjuster to establish a claims process, including the immediate next steps.

Download additional information:

If you have any questions or need assistance, please contact us directly:

Colin A. Daigle
Managing Director
Imperium Consulting Group, LLC
Office & Mobile: 202-570-6574