As the owner of a business, you know all the ins and outs of your operation. Your insurance carrier, however, doesn’t necessarily know your business at an intimate level. A good public adjuster (PA) knows both. We know how to translate your profit and loss (P&L), and we know how to assemble the pieces of a claim to help the carrier understand it.
Our recent claim with Spindel Eye Associates demonstrates this. Readers of this blog know we handled this very significant loss and helped Dr. Spindel get his business back up and running. Dr. Spindel’s business owner’s policy included both Business Interruption (BI) and Extra Expense (EE) coverage. Having lost his main office to a fire, Dr. Spindel was not just thinking of his business – he was also deeply worried about how he would take care of his patients.
Where to start? A business owner in this situation needs to figure out how to keep the business going while understanding how that effort relates to the business insurance coverage. Many clinicians aren’t sure where to start to assemble a claim. What’s covered? What’s the timeframe – is 12 months of coverage enough? In Dr. Spindel’s case, he also had other locations that would be involved – are they covered as well?
The building that burned was the primary hub/location for the Spindel medical practice, and it contained everything he relied on to run his practice. He had other spaces, but they were satellite locations that were separate and smaller. The IT issues alone would have a huge impact. If a PA wasn’t involved, the insurance company would likely just hire a forensic accountant to inventory the damaged property and equipment. This forensic specialist would then send the insured a laundry list of information they need to price the items, which the practice would scramble and do its best to provide while trying to maintain operations.
By retaining a public adjuster, you have your own forensic accountant working for you. They will understand your business and work with you to provide the requested information. The PA will determine what’s applicable and put together a customized claim to show your lost income and catalogue the extra expenses you incurred.
Another important aspect that a PA manages is business planning. This involves strategic conversations to determine what claim aspects will be most advantageous. After all, every business is different and has its unique circumstances.
The Spindel loss took an unusually long time to settle because there were different areas that SMW had to investigate to properly project the loss. Some of these areas posed real challenges to clarify, including understanding: what each doctor’s role was in the practice; work schedules; where patients could be moved around; and how to facilitate the performance of surgeries based on patient needs. Moreover, not all patients in an ophthalmology practice are the same. You have patients who are older who require more extensive care – and that’s more costly to the practice group.
In a situation where you’re looking at loss of business due to fire, you’re looking at pre-loss averages of revenue incurred and patients seen. SMW’s forensic work required us to go and cull out some patients that were not going to be turned away or were not lost due to the extreme care they receive. Think about, for example, geriatric patients who receive expensive eye treatment. If they don’t receive that care, they might go blind. The insurance carrier, in a short-sighted assessment, might view that as a “saved cost” because they’re looking at averages of pre-loss patients. In this calculation, the carrier averaged the number of patients seen and the revenue collected – and then projected that number forward to compute the loss. But that doesn’t accurately portray the medical practice’s true projections. SMW’s projections were markedly different from the carrier’s. Our job was to make the carriers understand the complexity involved in each patient service.
