Hurricanes and superstorms are a constant threat to Texas business owners, and an approaching storm can mean weeks of shutdown and insurance disputes. Restaurateurs are especially at risk of large losses due to the nature of their operations, and a weather disaster can lead to permanent closure. Attorney Bill Voss explores how restaurant owners can take steps to save their businesses and make the claims process easier.
Restaurant Owners Can Suffer Long-Term Effects from Hurricane Damage
As any business owner knows, the damage to a structure is only one of many costs caused by a disaster. Broken windows, leaking roofs, downed trees, and other physical losses will need cleaning and repair, but each passing day that the restaurant is unable to generate income is a potential threat to its survival—and a fight with an insurer only lengthens the time between filing a claim and a grand reopening.
Some of the biggest challenges facing restaurant owners after a hurricane include:
- Number of locations. Restaurateurs who own an entire restaurant chain can greatly extend their losses if many locations were hit at once. If the restaurant is attached to a retail outlet or hotel property that suffered hurricane damage, the claims process is likely to be more complex.
- Supply delays. Flooded roads and emergency evacuation often make supply chain interruptions a problem after a hurricane. A restaurant located in a relief zone may be unable to restock—or even import construction and repair materials—for several days.
- Cleanup costs. Hurricane damage often extends for miles from the point of landfall, stretching cleanup budgets and available manpower to a breaking point. Delays in flood draining and debris removal can cause bacteria and mold growth, complicating future restoration.
- Food spoilage. All restaurant owners should select the additional protection of food spoilage coverage, an option that may not be included in a standard commercial policy. In addition to fresh produce and dairy, high-end establishments may need to replace specialty foods or imported items that were lost in the storm.
- Upgrades and matching. It is not enough to make sure your restaurant is clean and safe for guests, it is vital to restore your location to meet the high standards you have set for your customers. Two optional forms of coverage that are vital for this purpose are upgrade coverage (also called law and ordinance coverage), which provides payment for additional costs of complying with current building codes, and aesthetic matching coverage, which pays for restoring damaged areas to an appearance that matches their surroundings.
What to Do Immediately After a Hurricane Strikes
The best way to protect a hurricane damage claim is to file for coverage as quickly and completely as possible. Whole counties may be affected by a hurricane, and insurers will be inundated with claims in the weeks after a hurricane hits. The faster you gather and file claims under all of your policies—including commercial property insurance, business auto insurance, and flood coverage under the National Flood Insurance Program (NFIP)—the better your position to recover for your losses.
After notifying your insurers of your losses, you can take further steps to protect your claims by:
- Making a list of damaged property. You should have comprehensive evidence your physical losses, including photos, videos, damaged items, and business records that can prove the value of each damaged item.
- Create a business income estimate. If you are making a claim for business interruption costs, you will need proof of past and projected revenue (such as expense reports, inventory reports, and a comparison of sales from the same quarter in previous years).
- Make temporary repairs and get estimates. While you are making the property safe for an insurance adjuster’s visit, make sure to get at least two bids from different contractors for the cost of repairs to the structure.
- Keep records of correspondence. You should have a dedicated person on your staff who deals with the insurer, keeps contact information for each contractor and adjuster, and maintains copies of all business regarding the claim.
If your insurer is attempting to deny, delay, or underpay your hurricane claim, we can help. Simply fill out the form on this page today to contact the Voss Law Firm or order a free copy of our book, Commercial Property Owners Must Read This BEFORE Filing an Insurance Claim.
