We are here to help you get your business back on track.
The LA Regional Small Business Development Center Network can assist you with your recovery efforts. We can also help you one-on-one, whether in person or over the phone.
Below, we’ve defined four key areas where small business owners typically need assistance.
A Disaster Recovery Toolkit for Small Businesses
This guide is designed to be a practical and effective resource for small business owners as they recover from major disasters, such as fires and earthquakes.
You can read through the guide below, or click to download the guide as a PDF.
For one-on-one assistance in person or over the phone from an LA SBDC advisor, call (TKT) KTK-TKTK.
To have someone from the LA SBDC contact you directly, enter your email address here:
Small Business Disaster Recovery Guide
Section 1: Steps to Take Immediately After a Disaster
Walk through four key steps to take as soon as the disaster is over.
Section 2: Getting Disaster Help from the SBA
The SBA has specific resources designated for small business disaster recovery.
Section 3: Working with Your Insurance Company
Guidance for working with your adjuster, filing claims and calculating your losses.
Section 4: Business Recovery Best Practices
Tips to help you and your business survive a major disaster or disruption:
Steps to Take Immediately After A Disaster
STEP 1
Find your business insurance policy.
Be sure to read the policy carefully to clarify what losses your insurance company covers and what losses are your responsibility.
If your insurance documents were destroyed in the disaster, do not panic.
Call your insurance agent or insurance company and request a copy of your policy. Ask for the entire policy –not just the cover page or the declarations. If you do not know the name of your insurance company or insurance agent, check with your mortgage lender or with your bank. They may have records of your insurance information. If those options are unavailable, call the California Department of Insurance (or your states Department of Insurance) which can be reached at 1-800¬927-HELP (4358) or at http://insurance.ca.gov/.
STEP 2
You should contact your insurance agent or insurance company IMMEDIATELY to begin the claim process.
Most policies require that the business owner promptly notify the insurance company of damage or losses. For that reason, it is important that you begin the claims process as soon as possible.
You should contact your insurance agent or insurance company even if you do not know if you are covered or if your claim may not exceed your deductible.
If you have separate flood insurance, also call your flood insurance agent to report your claim. Your insurance agent will prepare a Notice of Loss form, and an adjuster will be assigned to assist you. Most insurance carriers and state departments of insurance offer a toll-free telephone number to facilitate the claim filing process.
When you call your insurance agent or insurance company, be prepared to provide:
- The name of your insurance company (your agent may write policies for more than one company)
- Name and address of insured
- Your policy number
- Contact name, phone and fax number
- Location of loss
- Brief description of loss
When you contact your insurance company, ask:
- When an insurance adjuster (a person professionally trained to assess the damage to your property) can be expected to visit your property so that you can plan for the visit.
- For the specific information required for the proof of loss. Some companies may have a detailed list of documents they seek or require you to fill out a particular form. A proof of loss provides details identifying the property destroyed or damaged and documents the amount of loss incurred.
Keep your insurance company informed of your current contact information.
If you are in a shelter or cannot easily be reached, make sure to give your insurance company or agent the contact number of a friend, relative or someone else who knows how you can be reached. When dealing with your insurance company, document every conversation. Be sure to write down the name of the person with whom you speak, the date and the substance of your call and your claim number. It may be helpful to keep all of this information in a notebook so that it is in one place. This will help in future dealings with the insurance company.
STEP 3
Photograph the premises, showing any damage or flooding. claim process.
If reasonably possible, protect the property from further damage.
Damaged property that presents a health hazard or that may hamper local clean-up operations should be disposed of. Be sure to adequately describe and photograph discarded items so that when the adjuster examines your losses and your records, these articles are included in the documentation.
Prior to signing an agreement/contract with a cleaning, remediation or maintenance contractor, consult with your adjuster or insurer concerning coverage.
Photograph the outside and inside of the premises, showing the damaged property and the height of the water if your property was flooded. However, do not enter your property if it is not safe to do so. Separate the damaged from the undamaged property, and put it in the best possible order for the insurance adjuster’s examination.
- Collect and organize backup documents.
- Gather additional information and documents for the proof of loss. Generally, any information substantiating the claim (photographs, receipts, records) can become proof of claim.
- Gather vital records, ledgers and other proof that supports valuation.
- If damage in your area is widespread, check with local authorities to see if they are coordinating debris clean-up.
STEP 4
Make a list of areas with structural damage.
As you look over your property, make a list of structural damage you want to point out to the insurance adjuster.
If you’ve purchased contents coverage, make a list of damaged property. List the quantity of each item, a description, brand name, where purchased, its cost, model and serial number (if appropriate) and your estimate of the loss amount. Attach your bills, receipts, photos and any other documents. Good records speed up settlement of your claim.
Getting Disaster Help from the SBA
What You Need to Know
- SBA offers federal low-interest disaster loans to businesses of all sizes, most private nonprofit organizations, homeowners and renters.
- Businesses of any size may borrow up to $2 million to repair/replace disaster property damage.
- Small businesses, small businesses engaged in aquaculture and most private nonprofit organizations may also borrow to help meet disaster-caused working capital needs. The $2 million maximum applies to the combination of property damage and working capital loans.
What You Need to Do
- Register with FEMA at https://disasterassistance.gov. This is the fastest way to register for help.
- Small business owners should submit their SBA disaster loan application, even if they are not sure if they will need or want a loan. If SBA cannot approve your application, in most cases we refer you to FEMA’s Other Needs Assistance (ONA) program for possible additional assistance.
How to Apply for SBA Loan Relief
- Apply online using SBA’s secure website at https://disasterloan.sba.gov/ela.
- Apply in person at any Disaster Recovery Center and receive personal, one-on-one help from an SBA representative. For additional information or to find a location near you, visit our website at https://disasterloan.sba.gov/ela, call SBA at (800) 659-2955 or email disastercustomerservice@sba.gov. Individuals who are deaf or hard-of-hearing may call (800) 877-8339.
- Apply by mail: Send completed paper application to U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
Working with Your Insurance Company
If an adjuster is not assigned to you within several days, contact your insurance company or the state department of insurance. It is a good idea to make the request for an adjuster in writing. Keep in mind that an adjuster will not be able to visit your property until officials declare that is safe.
WORKING WITH YOUR ADJUSTER
Generally, your adjuster will contact you within 24-48 hours after receiving your notice of loss. However, depending on local conditions and the severity of the disaster, it may take more time. Once the adjuster contacts you, a time will be set for the adjuster to view your property. You may ask the adjuster for an advance or partial payment.
During the initial visit to your property, the adjuster will take measurements and photographs and note direct damage. This is called “scoping” a loss. Be assured that your adjuster will be an experienced claim professional and will notice many points of damage you could overlook. You are, however, encouraged to point out all damage you have noticed. After the “scope” is finished, the adjuster will give you a local contact telephone number and will tell you whether any additional visits are needed.
The adjuster then uses the evidence from the visit(s) and the documentation you have provided to complete a detailed estimate of damages. You will get a copy of the estimate. Use it as a guide when you ask for bids for repair work from licensed professional contractors. You can also ask your insurance company for an advance on your insurance proceeds. Funds disbursed in the form of an advance will be deducted from the final settlement. If you have a mortgage, your bank will need to sign the advance check.
You may also be eligible for expedited assistance from the federal government through FEMA. You can apply for such assistance through FEMA on line at http://www.fema.gov, or by calling 1-800-621-FEMA (3362), TTY 800-462-7585. FEMA representatives typically visit disaster assistance centers.
Your official claim for damages is called a Proof of Loss. This must be fully completed and signed and in the hands of your insurance company within 60 days after the loss occurs. The Proof of Loss includes a detailed estimate to replace or repair the damaged property. In most cases, the adjuster, as a courtesy, will provide you with a suggested Proof of Loss. However, you are responsible for making sure that it is complete, accurate and filed in a timely manner. Be sure to keep a copy of the Proof of Loss-and copies of all supporting documents for your records.
Payment of Claims
Your claim is payable after:
- You and the insurer agree on the amount of damages.
- The insurer receives your complete, accurate and signed Proof of Loss.
- In general, insurance companies should acknowledge receipt of your claim within 15 days of receiving it and should communicate decisions on claims within 40 days of receiving them. Payouts should occur within 30 days of your acceptance of their offer. More information on claims payment is in your policy.
Supplemental Claims
If you notice additional damage to your building property or personal property after filing your claim, you may file a supplemental claim. This means, essentially, that you must repeat the documentation and filing process for your original claim –including a proof of loss –but only for the newly discovered damage. Supplemental claims should start by immediately notifying your adjuster, agent and/or company representative.
Once you have completed documentation, present it to your adjuster, who may need to make another property visit to verify your loss.
Once you receive the letter stating that the cost to repair damage to your building is 50 percent or more of its market value, you may file an increased cost of compliance claim (ICC). You should contact your adjust-
er or your insurer’s claims representative to file the ICC claim. You have four years from the date of the letter declaring the building to be substantially damaged to complete your chosen mitigation activity under the terms of the standard flood insurance policy. Your insurer will provide you with additional information to assist you in completing your ICC claim.
Business Interruption Losses
Business interruption coverage is a typical and important part of most businesses’ property insurance programs. Business-interruption coverage is purchased to cover the loss of business income and at least some of the extra expenses associated with restoring business operations. There are many types of business interruption insurance policies. It is important for you to review yours to ensure that you maximize your ability to continue operations with minimal disruption.
DO NOT DELAY in contacting your insurance company. Give notice quickly to avoid penalty or voided coverage. Refer to the steps listed above in making a property insurance claim.
Calculating Business Interruption Losses
Business interruption claims can become more difficult and even contentious when differences of interpretation emerge about the reliability of projections or the meaning of policy provisions. A successful claim entails maneuvering through the gray areas inherent in business interruption, including financial projections, consumer demand and policy interpretation, to reach a number that’s reasonable, credible, defensible and well supported.
Business Recovery
Best practices for businesses surviving a major disaster or disruption:
Remember that recovery can be a long-term process depending on the severity of the disaster.
Recovery can last many weeks, months and even years.
Be diligent in the practice of self-care.
Take advantage of mental health resources that are available to you. Do not skip meals. Be sure to exercise. Get enough sleep. These simple daily activities will help create stability as you navigate a new reality.
Know that you may need extra time processing information that is given to you.
Be patient with yourself and engage with services and resources when the time is right.
Be your own advocate.
Know your rights as an insurance holder and what federal and state resources are available to you. Connect with your local Small Business Development Center, Women’s Business
Center, SCORE or SBA office to learn about available local, state and federal resources you may be entitled to.
Ask for assistance even if you do not think it is necessary in the moment.
If your business has been impacted by a federally declared disaster, be sure to take advantage of all federal resources available to you. For example, in the event of a federally declared disaster, the SBA offers low interest loans to businesses that have been impacted.
You may not think you that you need a loan immediately after a disaster, but depending on the severity, cashflow and sales may be impacted in the coming weeks and months.
