ADJUSTERSINTERNATIONAL.COM 3 And no matter how the extension of coverage is written, questions may still exist as to the exact intent and meaning of the language. To avoid potential conflicts, not to mention disappointment after a loss, before a loss occurs you can tell your broker your precise intent of the coverage. If possible, negotiate changes and clarifications to fit the insured’s particular needs. Focus on the Needs of the Risk Being Insured As will be seen from the examples discussed in the next pages, a wide variety of clauses is available to cover the claim preparation costs needed to prove or support a property or business income loss. Some are included in the basic policy form or language; others must be added by endorsement. In covering claim preparation expenses, think first about the specific exposures being protected against and the exact provisions that may be needed. Equally important, consider the limitations or exclusions that should be avoided. Knowing precisely what to anticipate is key to negotiating and securing the appropriate provisions. Create Scenarios The insured who has suffered a serious loss previously will have strong ideas as to the need for the coverage and the type of sources that should be insured for adequate protection— including dollar amounts of insurance. One who has never experienced a devastating loss, however, may face a far different challenge. A good starting point for this insured is to construct a “what if ” scenario—projecting the maximum claim preparation expenses that might occur in the event of a loss. Answer such important questions as: • Are duplicate records available if in-house records are destroyed? • Are inventory reports always available? • Are these records reasonably up-to-date? • Do staff have experience with handling complex claims — and do they have the time to handle a loss — or would outside expertise be required? • What types of professionals are needed, i.e., accountants, appraisers, engineers, public adjusters, attorneys? • Are these professionals readily available to the insured and how familiar would they be with their property and operations? • What are the expected costs for employing outside experts? Comparisons of Loss Adjusting Fees Coverages To this end, we have collected and compared the loss adjustment fees coverage by discussing how carriers take different approaches to this important protection. We also offer In covering claim preparation expenses, think first about the specific exposures being protected against and the exact provisions that may be needed. Analyzed below are examples of several representative endorsements along with comments noting some advantages and disadvantages of each. 1. “Professional Fees. This Policy covers the actual costs incurred by the Insured, of reasonable fees paid to the Insured’s accountants, A good starting point for this insured is to construct a ‘what if’ scenario — projecting the maximum claim preparation expenses that might occur in the event of a loss.
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