• Business Solutions

No matter the size or type of your business, a disaster could occur that could seriously curtail or even shut down operations. As a manufacturer or contractor, this can be easy to grasp, but even if you’re office bound, like a nonprofit or healthcare provider, you’re still vulnerable to such troubles as utilities loss or flooding from a faulty building system or tenant. Most businesses feel immune to disaster and it is not unusual for them to overlook creating disaster plans. Further, those companies that do have disaster or continuity plans in place often fail to update their plans on a regular basis. Besides having an updated plan, it is also important to test plans.

Think Negatively, Then Creatively

Business decision makers have to spend time preparing for the possibility of catastrophe. It could be a natural event, or it could have a human origin. Regardless, an owner, manager or executive has to think about the many events that could either temporarily or permanently interrupt their business. In other words, a business must consider what threats exist to their normal, profitable operations. The task may initially appear overwhelming. However, it is just a matter of considering what the business does; where it does it; how it does it; and why it does it; then, examine what could happen to stop any of these things.

Natural interruptions could be caused by wind and rainstorms, flood, snow/ice storms, earthquakes, extended or extreme temperatures, etc. Human events may include fires, break-ins, mobs, sabotage, etc. Typically, a thorough consideration of problems involves identifying the worst possible things that could occur….even when their chance of happening is remote. Remember that a single, unanticipated event could cripple or even terminate a business, so you need to have a plan that contemplates a wide variety of harmful situations.

Consideration must be given to a business’ physical structures and property, machinery/equipment, management, finances, employees, products, stock, finished goods and goods in process, services, communications, transportation, contractual obligations, competition, suppliers, distribution, and so on.

Recovering from disaster depends upon many factors. Regardless the reason for a business suffering a serious interruption, the goal has to be on resuming normal operations as quickly as possible. Getting back into business often depends upon insurance, but other arrangements may be necessary and even be more important. Consider plans that include the following:

• Arranging use of another location to run the business
• Having duplicates of key business records (kept at another location)
• Arranging other sources of product supplies if a key supplier’s business is interrupted
• Having access to substitute production machinery
• Buying and maintaining generators/alternate sources of light and power

When considering how to deal with events that could threaten your business, the biggest disaster could be the failure to create a viable disaster recovery plan. The Risk Managers at Peoples First can provide resources to help you develop a disaster recovery plan for your manufacturing, contracting, healthcare, nonprofit or other type of business so feel free to contact us and discuss your situation.

An insurance policy is a legal contract that exchanges an insurance company’s obligation to pay for certain losses if the person covered by the policy pays a required premium. This holds true whether the policy covers your home, car, boat, life, airplane, jewelry or business. If there is a serious dispute between you and your insurance carrier regarding the coverage of a loss, a courtroom often becomes the setting for resolving the matter, but not always.

To Sue or Not to Sue?

In many instances, filing a lawsuit is unavoidable. For instance, when a person seeking coverage has his claim denied, a lawsuit may be the only action that is available. But seeking satisfaction in court can be its own problem. Court calendars (dockets) are often backed up so it could take months or even years before a hearing can take place. Trials may be followed by one or more appeals. The legal expense can be staggering, involving court costs, filing fees, attorney costs, research costs, fees for expert witnesses and a host of other expenses. Time and cost considerations are great incentives for finding other methods to resolve disputes.

Alternative Dispute Resolution

When disagreeing about the amount that should be paid for a loss, mediation and arbitration are popular alternatives to suing your insurance company. Each is a form of Alternative Dispute Resolution (ADR) since they are alternatives to going to court.

• Mediation – This process involves the two parties meeting to discuss their situation with the help of a mediator. The mediator typically has special training and a legal, financial or similar background. As a disinterested party, the mediator studies information from both sides of an argument. Mediation sessions begin with each party fully explaining their position to the other party and the mediator. It is critical that each party is able to explain their side of the issue without interruption. The mediator then discusses each party’s position in private. Afterwards, the mediator shuttles between the parties and tries to negotiate a settlement. The most important features of mediation are that the process is voluntary and the disputing parties are actively involved in reaching a solution.
• Arbitration – This is a method that is frequently required by an insurance policy provision. Under arbitration, you and the insurance carrier each select a representative (arbitrator). Once the arbitrators are selected, they agree on another arbitrator who acts as the arbitration judge. The three persons discuss the merits of the situation and, once any two of the three persons agree on a settlement amount, the process ends. Arbitration differs from mediation in two important respects. First, the disputing parties are bystanders, waiting for a decision to be made by their selected representatives. Second, arbitration is (generally) binding on both parties.

If you are in a dispute with your insurance carrier, no course of action is perfect. Considering the cost and time involved with lawsuits, it makes sense to take advantage of other options to handle high-stakes disagreements. If you need more information, Peoples First is able to navigate you towards an advisable way to reach agreement with your carrier.

Our insured had a large fire which destroyed storage building housing multiple pieces of equipment and tools. Due to policy limitations, the company was restricting certain areas of coverage. Peoples First researched the carrier position and demonstrated their position was flawed. As a result, our client received and additional $64,000 in coverage.