CREJ - Property Management Quarterly - April 2017
John Elway and Von Miller; Carmelo Anthony and Nikloa Jokic; Todd Helton and Carlos Gonzalez; and Joe Sakic and Nathan McKinnon – local, recognizable athletes known for their exceptional talents. Fans appreciate each individual’s contributions to his teams. However, it takes a collaborative effort with assistance from the whole team to achieve success – they didn’t do it alone. Success can be defined in many ways. For teams, the end result of a championship is tabulated in wins and losses. In general, profits are the end result most of us seek – we want revenue, from the goods or services we provide, to exceed expenses. Success, in terms of profits, typically is achieved at higher levels when all those within an organization excel at their respective roles. Small and large businesses can achieve success in the same industry if each team is comprised of equally talented and knowledgeable personnel offering similar services. However, if there is a disconnect between industries, services, talent or knowledge, the business possessing more experience and knowledge holds an upper hand. Members of the Denver Nuggets would not fare well in a baseball game against the Colorado Rockies. Members of accounting firms specialize in accounting, members of law firms specialize in legal services and members of a hotel staff specialize in hospitality services – each member within an organization has a particular role or service to provide that, if performed properly, leads to success and profits. However, you would not rely on an accountant for a legal opinion, nor would you rely on an attorney to establish logistics for a large hotel dinner banquet because his expertise is elsewhere. Insurance companies have many employees within the organization providing different services, all of which help the company be profitable. Property and casualty carriers have experienced members on their team providing claims services as well as having relationships with many outside consultants who provide claim services on behalf of the insurance company. If your property or business is damaged by fire, water, hail or other event, your insurance carrier will assign an adjuster to the claim. The loss will be reviewed and monitored by supervisors or others within management with the authority to settle or resolve the claim. The insurance company adjuster will be your primary contact on the claim, but the insurance company could retain other individuals to assist in the investigation. As each loss is different, an insurance company’s cast of characters varies, but could include a cause-and-origin expert, an asbestos and lead-based paint consultant, certified asbestos and lead-based paint abatement contractor, a mold consultant and mold abatement contractor, a structural engineer, a building consultant or general contractor, a business personal property inventory specialist and a forensic accountant. You might imagine that if many or all of these individuals are involved: • The loss is significant; • The amount of activity at the property will be significant; • The number of people impacted will be significant; • The amount of time required to assemble and provide supporting information and records and for the claim to be resolved will be significant; • The amount of time to complete required repairs significant; and • Your concern for resuming operations and achieving or exceeding previous profit levels will be significant. It is necessary to properly and accurately measure the loss, and it may be reasonable for the insurance company to retain multiple consultants, each with a suggested area of expertise. These representatives of the insurance company may provide information found within your policy. Rather than rely solely on input from insurance company representatives regarding the claim, consider outside assistance from consultants who are equally experienced and knowledgeable on insurance matters and are not working for the insurance company. Differences of opinion are quite common on property claims – whether as to covered damages, structural needs, scope of repairs, costs to replace equipment or lost profits. You need a voice to ensure you are protected. Property claims professionals retained by insurance companies possess considerably more knowledge on how insurance companies handle and adjust claims than do business and property owners. You should expect and demand that adjustment practices be fair and equitable, but do not assume that it is so. If the only consultants working on your loss are those retained by the insurance company, you are at a considerable disadvantage. Insurance company profits are reduced when the amount of money paid on claims is significant – and profits are increased if payment on claims is low. The carrier’s team ultimately protects the carrier’s profits; assemble your own team to accurately measure damages and protect your profitable business or property – your profits are as important as theirs.