The first things that spring to mind when commercial organisations think flood are: damage and destruction. They don’t necessarily think about the possible flow of ongoing disruption, displaced staff and supply chain woes.
When flood strikes, business interruption losses can quite literally come raining down. Getting back up and running is hard because of the mass inundation of water, which is why the expertise of restoration companies like Access Restoration Services (ARS) are so vital.
“The number one challenge for commercial clients after a loss event like a flood is normally business interruption, which unfortunately is a topic that’s overlooked by many,” said Nathan Normoyle, vice president of National Operations at ARS Canada.
“Large commercial organizations might have 500-1,000 employees in one location,” he added. “If the whole workforce or a majority of staff are misplaced because of a flood event, or unable to work under their normal conditions, it creates a huge logistical challenge for business continuity. Business interruption losses can cost the company and the insurer multiples of what the actual physical damage to the property might cost.”
In January, business interruption was flagged up as by far the most significant concern among risk managers in Canada, according to the Allianz Risk Barometer 2018. Experts partly attribute this to the fact that post-loss restoration operations (from fire, flood, windstorm etc.) are becoming more and more challenging.
Insurers, claims adjusters and post-loss restorers are coming up against new things like highly technical machines, complex supply chains, and even environmentally-friendly building products that can be difficult to repair after a loss. That’s where the management skills and technical expertise of restoration companies really take centre stage.
“At ARS, we manage the business interruption process for our clients and customers,” Normoyle told Insurance Business. “When we visit an impacted property, we assess three key things: the extent of the damage, whether damage can be contained and commercial operations can continue, and the most rational step to avoid business interruption and minimize cost to both the business and the insurance company.
“We will do everything in our power to keep a company operating. That might include shutting off a damaged area and moving operations to another section. If a site is completely demolished or critically damaged making it impossible and unsafe to maintain business operations, we will suggest alternatives and even construct temporary facilities on or off-site to get commercial organizations back up and running as quickly as possible.”
