In the weeks and months following devastating storms like hurricanes Helene or Milton, ravaged areas will welcome scores of contractors. These crews not only have the chance to help rebuild communities, but also to keep busy with new projects.

But in looking after their neighbors and their own businesses, contractors also need to protect themselves. And that means – especially for companies with little experience in disaster recovery efforts – having the right insurance coverage in place.

Sheneka Johnson, Underwriting Manager at Builders Mutual, and Jeff Lenhart, Director of Claims Litigation, discuss how to work with your agent and adjuster to help you thrive while you’re helping others recover.

Raising awareness of business hazards

While insurance policies function about the same whether companies are working in disaster recovery or under normal conditions, it’s crucial that contractors operating in a post-storm environment avoid potential pitfalls that could affect their coverage.

For example, contractors must be aware of local rules before going into a particular state to perform certain types of work. Different states have different certification and licensing requirements. If companies violate these requirements, they can be fined or incur other civil penalties.

Moreover, companies should pay extra attention to the type of work they’re intending to do. Do they have the necessary experience? If you’re a tradesman, will work be performed outside of your current trade? If you are a general contractor, do you have any expertise in restoration? Having heavy equipment, resources, and manpower doesn’t automatically mean that your company has the qualifications to perform a job effectively and safely, Johnson says.

If companies are looking to get into certain lines of work – restoration, for example – starting that journey after a hurricane may not be the best time, Lenhart says. That’s because job-sites may not have power, water, or sewer – adding difficult conditions on top of an already-steep learning curve.

Indeed, many contractors may not be ready for all the hazards found on a storm-ravaged job-site. There may be buildings that look structurally sound but could collapse at any moment, and standing water filled with snakes or even alligators, depending on the region.

Tips for securing the right coverage

What can contractors do to have the best chance of having their claims covered and paid for? It starts with having an accurate policy – and that starts with reaching out to their insurance agent well before work begins.

Come prepared to your agent conversation with information about:

• The exact nature of the work. Be forthcoming with what tasks you plan to perform, and ensure your policy has accurate classification codes. If you tell your agents you’re doing electrical work and this does not actually represent the work being performed, there could be issues during an audit that could affect your premiums. Your agent will also want to know your experience, as well as that of your employees, so be prepared with a work history that can support your plans.
• Location of work. Check that your policy covers work across multiple states if you intend to travel. When it comes to workers’ compensation, for example, a covered worker in Georgia may not be covered in North Carolina if you’ve crossed state lines to help with recovery. What’s more, if you have commercial auto coverage, how far your crews travel from their base of operations could impact your insurance premium.
• Duration of project. Will your work last one to two weeks or for an extended period of time? That timeline will help your agent write your policy accurately. With that said, sometimes determining an exact timeline can be challenging, since the availability of materials and labor could be limited after a natural disaster.
• Exclusions and gaps. Understand what items could be excluded, including mold or pollution work, under the CGL policy. Similarly, work with your agent to identify gaps in your coverage that may need to be filled with additional policies. For example, business operations are rarely covered for floods (the exception being commercial autos).

Filing a claim is easy

If things don’t go as planned on the job-site and you need to file an insurance claim, you’ll follow the same reporting process that you would at any other time. Policyholders should get in touch with their insurance company to report a claim. In the meantime, they should also take all reasonable steps to protect their property – for example, tarping a roof to prevent further damage.

However, just like with the underwriting process, the unique circumstances of disaster recovery can alter how claims are handled.

For example, if a policyholder is found to have materially misrepresented facts on their application about the nature of their work or experience, a claim could be denied. If proper certification or licensing requirements weren’t met, a claim could still be paid, but underwriting could be notified of this omission, resulting in potential premium increases.

Additionally, if a policy contains certain exclusions – say, a building’s roof isn’t covered as part of the business’s property coverage – then a claim to repair that roof could be denied. Again, one more reason to talk with your agent to ensure you have the coverage that’s right for your business.

Here are some tips to make the claims process go as smooth as possible:

• Be patient. Adjusters are often overwhelmed in the wake of disasters. But Builders Mutual adjusters are committed to handling your claim with speed and accuracy.
• Keep receipts. If you need to pay out of pocket for necessary, reasonable, temporary repairs to protect the property from further damage or to restore normal operations, keep your paperwork so you can be reimbursed.
• Be proactive. Before your adjuster arrives, write down your concerns and take photos of any damage so you can provide a comprehensive account.

In fact, if there’s one thing that can best prepare you for disaster recovery coverage, it’s communication. Speak with your agent beforehand – and contact Builders Mutual at any time with questions or concerns about protecting your business and workers.

If you have a claim to report, please call our Customer Contact Center at 800-809-4859.