It is inevitable as a building owner, landlord or management company that at some point your property will be subject to an unfortunate event. Pipe failures, backups, sprinkler breaks and fires are only a few of the devastating events that can occur to a structure. These events can result in significant costs and impacts to a building’s daily operations. Loss of revenue, limits of use and overall tenant displeasure can be an impact felt for months after a loss has come to a close.
The typical reaction is to pick up the phone and call for help. Options abound with restoration contractors ready and willing to respond at a moment’s notice with trucks full of men and equipment. The end result can be an expensive lesson in costs not picked up by policy coverage or, even worse, legal proceedings required to end a claim process. Let’s learn the keys to successfully managing the claim process.
The five keys to transitioning through an insurance loss:
- Transparency; and
Working with contractors, owners, insurance carriers and policyholders is what we specialize in and our exposure to more than 8,000 insurance-related losses every year provides us the opportunity to evaluate where things go wrong. One of the areas we focus on is invoice and cost analysis following an event. Based on our interactions with remediation contractors, here are the five keys to understand how to prevent you from holding the bill at the end.
Documentation. In our industry, there is no such thing as too much documentation. Digital pictures are nearly limitless and virtually free; videos speak a thousand words; tracking sheets tell a story; and documentation helps make a case. Where most remediation contractors fail is answering a very important question: Why? Why did you remove those materials? Why did you use that equipment? Why did you employ those laborers? These and many more “why” questions are the main reasons building consultants are unable to substantiate scope and cost performed by a contractor.
Communication. The most beneficial environment an owner/landlord/management company can create is to require an environment where the expectation is a completely open line of communication between the restoration contactor and building consultant. Fostering an open link between the two helps to mitigate the number of unanswered “why” questions at the end. It’s not about asking permission; it’s about the two working together to maintain an open dialogue for solving problems through a project life cycle. Communication expectations are driven by the insured from Day One.
Collaboration. The most successful environment for completing a project is one in which the remediation contractor and building consultant are working together to come to an agreement or understanding on methodology, process and reporting. Maintaining open communication, when a remediation contractor and consultant can work hand-in-hand on solving issues that arise during a project, results in far fewer issues to resolve in the end. Having disagreements is not uncommon; however, when there are no discussions during the course of the project, it only leads to unsupported activities taken by the contractor.
Transparency. If the first three keys of this discussion are achieved, transparency is a simple byproduct during the claim process. It doesn’t take much to erode the trust of a building consultant by attempting to sneak or hide scope and cost items. It’s not if these items will get discovered; it’s a matter of when they will be discovered. As a building consultant, our approach is very simple: Is the work fair and reasonable? By maintaining open discussions and involving the building consultant in the process, the process can be kept transparent and managed.
Control. An insured has it in his best interest to manage the activities and processes of a contractor through the project life cycle. Using a building consultant as an additional resource for understanding the process and steps in a loss also can be helpful. An owner/insured has every right to be in total control of his contractors during a project. Maintain clear understanding of roles and responsibilities of all parties involved.
In summary, insurance losses are not fun and can be devastating to an owner. By understanding the role each party plays in the process and maintaining a firm grasp on the five keys to handling an insurance loss, you can prevent becoming victim to an overzealous contractor or an under-involved building consultant. Documentation, communication, collaboration, transparency and control are all strategic goals for maintaining a successful and timely project. Keep a hold of the bag and the money in the bank.