Risk & Business Magazine Capri Insurance Spring 2016 | Page 25

The True Cost of a Loss
How to Get Back to Business After a Claim
BY: CHRIS RIGG, CIP, SENIOR VICE PRESIDENT, CAPRI INSURANCE

A

property insurance policy is designed to repair or replace
damaged goods with material of like kind and quality. If
your flooring is damaged when a pipe breaks, you get a nice
new floor and pipe fixed. That doesn’t sound so bad. However,
the total cost of an insured property loss cannot simply be
measured in terms of what it cost to repair or replace what was
damaged less any deductible.
At the top of the list of things not covered by the policy is the
stress and anxiety that any business owner feels after a loss.
Do I have enough coverage? Do I have the right coverage? Will
my customers come back when I reopen? Unfortunately many
of the fears a business owner experiences after a loss are quite
real. What will happen to your employees if they face a layoff
after a loss? Not only might they have to find another job, they
will take important skills and knowledge with them. Will your
customers all return after having to go elsewhere for a period
of time? We all hope that our customers appreciate the unique
value that we offer them but will a business owner really want
their existing customers to test that proposition?
Your time has a value as well for which you will not be fully
compensated. Your business interruption coverage may
continue to pay your salary as well as that of your key employees
but it will not pay for the many extra hours that you may be
called upon to put it after a large loss. Time with your family
and friends, vacations, leisure pursuits; all of these may have to
be set aside while you go through the rebuilding process.

There may be assets in your business that are unique or have
sentimental value that cannot be replaced. If you operate a restaurant
in a heritage building, some of its charm may be lost after the building
has to be rebuilt. Do you have art or features in a building that cannot
be re-created that have added to the value of your business? A client
of mine has a mural on one wall of his business that was painted by
an artist who subsequently became very well known. That mural
draws customers to his business and cannot be replaced.
If something cannot be insured, then the best course of action is to
try to make sure that the loss never happens in the first place. Good
risk management will go a long way to alleviating the anxiety and
protecting you from having to find out which of your fears were well
founded.
Chris Rigg is a Partner and Senior Vice President at Capri Insurance. He
has 30 years of experience in the insurance industry, is an associate of the
Insurance Institute of Canada, as well as an instructor for the Insurance
Brokers Association of BC. Chris specializes in commercial insurance with
a focus on national and provincial programs.

SPRING 2016

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