Policyholders Guide for CAT Claims

Natural hazards and extreme weather might be uncontrollable, but leaders can control how businesses prepare for and respond to disasters.

Ensuring your staff are trained effectively, all prevention measures are implemented ahead of a disaster striking, and plans are in place if the unexpected does occur can help ensure your people, assets, and business are protected, and business continuity is maintained.

Property damage insurance claims are among the most infrequent for corporate policyholders, but in recent years, hurricanes have become more disruptive. For example, 2020 was a particularly active Atlantic hurricane season, with 14 hurricanes, 7 major hurricanes, and 11 named storms hitting the U.S. coastline. Hurricane Zeta was one of the many hurricanes that year; it made landfall in Louisiana after following a destructive path from Mexico, causing an estimated four billion dollars in damages.

The route of Hurricane Zeta and the impact mapped on the Intelligence Fusion platform [Image source: Intelligence Fusion].

According to AccuWeather Founder and CEO Dr. Joel N. Myers, the 2020 Atlantic basin hurricane season was estimated to total between $60 billion to $65 billion in damage and economic losses.

Colorado State University’s tropical meteorology project team have forecast 2024 to be one of the most active hurricane seasons yet. Hurricane Beryl was the first hurricane of the year; it became the earliest category-five Atlantic hurricane on record, going back around 100 years. The impacts were devastating, resulting in loss of life, destroyed buildings, hundreds of thousands without power for extended periods, major travel disruptions and infrastructure damage. This was a stark reminder that businesses must be prepared to mitigate as much of the impact as possible and maintain operational continuity as well as staff safety. 

An incident related to Hurricane Beryl, mapped on the Intelligence Fusion platform [Image source: Intelligence Fusion].

So, how can businesses better prepare? We hosted a webinar on July 18 with leading risk professionals who shared tried-and-tested strategies to help ensure your business mitigates risks associated with hurricane season effectively. Watch the on-demand version now.

Unfortunately, no matter how prepared a business may be ahead of a major hurricane, damage can still be caused. In this instance, when catastrophe strikes, recovering insured losses is essential to rebuilding and resuming operations. Affected policyholders will need expert help to evaluate, organize and document their claims to present to insurers. Sigma7’s forensic accounting team is devoted to preparing claims for policyholders. It can be highly advantageous to have a team of experts to represent your interests throughout the property damage and time element claim process. This often results in quicker claims processes and, therefore, financial recovery.

Though the specific insurance claims and the policyholders may change, the vital steps to recovery remain the same. One thing both sides agree on is that the claim process goes smoother when the policyholder is well-prepared for the demands of a claim from start to finish.

1. Establish Appropriate Accounting Methodology: Provides guidance and an organizational framework for post-loss activities, establishing specific accounts to capture the loss.
2. Property Damage Expense Categories: Explains the types of expenses that may be included in each category of coverage and the documentation required for these costs.
3. Claim Preparation Objectives and Overview: Identifies objectives for the claim preparation process, and provides a conceptual framework for achieving them.
4. What is Covered: Examines the direct and indirect exposures to loss that are typically encountered, and provides guidelines for determining whether specific types of property damage losses are covered under the policy.
5. Claim Preparation Procedures: Suggests timetables for the submission of inventory, property damage, and discusses the format and content of standard claim submissions.
6. Audit and Settlement Guidelines: Discusses the procedures undertaken by the insurers adjusters and experts, and provides an overview of the settlement process.