There will be many individuals involved in the claim, both from the insurer's side and your client's:

• On the insurer's side, there will be the claim adjuster, as well as their account executive, underwriter and reinsurers. The insurer also will involve third parties, including engineers, claim auditors, construction consultants and coverage attorneys. Their keys to the game will be adjusting the claim, substantiating the loss, mitigation activities and understanding how operations are getting restored.
• Your client's team likely will include the CEO, CFO, plant management and possibly their legal and accounting departments. In addition to the broker or agent, your client also may involve other third parties including contractors, forensic accountants and outside coverage counsel. Their goal is to expedite and optimize the recovery. Their keys to the game are the safety of employees, restoring the business as quickly as possible, mitigating the loss and getting the insurance recovery paid as soon as possible.

Now, let's look at the playbook. The first part has to do with valuation:

• Looking at the property damage, is the policy going to respond on the basis of actual cash value or replacement cost?
• Is the client going to repair buildings and equipment, or replace them? Will they use internal work groups to get some of this work done?
• What's the valuation for inventory? Is it selling price? Replacement cost?
• Control of damaged merchandise is important. Who makes decisions about damaged merchandise? Indeed, you want the client to be in position to make all those decisions.
• Is there debris to be removed? How will that be paid for? What business interruption and expediting expenses will the client incur after a loss?

Carefully consider the business interruption indemnity period of the loss. Remember, the property damage and period of restoration will drive the business interruption. Notably, the period of restoration will change based upon whether the decision is made to repair or replace equipment—and it's critically important to get that understood at the beginning of the claim process.

Read related: “Picking Up the Pieces.”

You also want to understand any expenses that will be incurred to help get the client's firm back into business as quickly as possible. If there's a partial impairment, what issues are likely to arise?

Look at the projections for sales and profit, and understand the client's ability to make up sales (or not). For example, can sales be generated via the Internet if a retail location is down? The insurers will look at the business interruption and the mitigating expenses in adjusting the claim. Which functions have been outsourced? Which have been performed internally? Review the client's incremental costs of marketing, advertising, and logistics and discuss any discounts offered by the client to retain market share.

With all this work done, you're ready for the “fourth quarter”: the settlement. Keep in mind, the settlement process is a negotiation. For brokers and agents, it's important to understand the major issues for the client, the major issues for the insurers, and their key arguments. During the negotiation, try to focus only on the weakest elements of the claim. The elements that are not disputable should not be part of the negotiation at the end of the claim. The good news: 99.9 percent of physical damage and business interruption claims eventually settle.

When the claim has settled, go back over the process. Were there failures in any of the steps along the way? What went well and what didn't? All of this needs to be reviewed with the client so the process can be improved promptly in the event of another claim. Were the pre-loss preparations adequate? Was the communication flow positive and did it work? Did everyone work together toward the resolution? Were there any issues with the client's expectations? How about at the plant level, the location level and all the way up to the CFO and senior executives? Discuss how the process can be improved if there is another event.

When the claim is closed, what should the broker or agent do as “Monday morning quarterback”? Take a look back at everything. Make claim service a key point during the next renewal if there's been a major event. What is the promise of better claim service worth for the agent/broker and insurer? What are the insurers prepared to do after a loss?

Read related: “Be Prepared.”

From the client's perspective, the value of the agent or broker can be greatly enhanced by strong support during the claim process, and the client may perceive you as a first-string member of the team. Indeed, you can achieve both improved retention and new business by providing value-added claims support before and after a loss. And that's a winning formula!