Business interruption insurance: Protecting hotel profits from being sunk by a water damage disaster

12/22/2022 (Permalink)

Blog Summary: SERVPRO® of Carrollton helps hotels prepare for water damage and lost revenue during the holiday season.

SERVPRO of Carrollton is available 365 days a year, including during the holidays, to provide water damage restoration services that help hotels and other businesses recover from a property damage disaster and return to normal business operations. A swift and efficient restoration process can reduce the loss of revenue during closure due to the effects of the disaster or the disruption from the cleanup and restoration process.

The likelihood that a hotel will experience a water damage disaster during the holidays is high due to the seasonally high occupancy rates, the number of rooms, and the water sources in each room (toilets, showers, and one or more faucets per room). Some hotels are located in areas prone to severe weather threats, such as hurricanes, tropical storms, tornadoes, and heavy thunderstorms.

The hotel owner or manager must know what information and reports are needed and required by the insurance company to determine lost revenue after a disaster. Fact-based lost revenue projections help move the assessment and rebuild process forward without unnecessary delays.

Many businesses, including hotels, have business interruption insurance. Also known as business income insurance, this insurance reimburses a business for lost revenue caused by a property damage disaster. The revenue interruption may result from the disaster's effects or the cleanup and restoration process. The policy coverage must be high enough to accomplish its intended purpose: to make the business whole after the disaster. This topic is a matter for immediate discussion with the insurance agent handling the policy.

The hotel will need proper revenue reports to make a meaningful and accurate revenue projection for the insurance company. These reports include:

• Profit and loss statements
• Revenue records showing historical performance
• Business forecasts
• “Booked” reservations
• Other miscellaneous industry reports that will assist in calculating an accurate projection of anticipated revenue that was forfeited due to the disaster

These reports and the formulation of accurate profit losses are complicated.

A simple key to success: A swift response and rapid recovery

When a hotel suffers a water damage disaster disrupting the provision of services and an interruption in the business revenue cycle, the most crucial goal is to get the business up and running as soon as possible. The best way to end the disruption is to secure the services of a property damage restoration company specializing in commercial water damage restoration. Here are some key features that hotel owners and managers need to look for when seeking the services of a commercial property damage cleanup and restoration company.

1. The restoration company emphasizes a pre-qualification strategy that encourages businesses such as hotels to establish a relationship before a water damage disaster or other property damage disaster occurs. This pre-qualification process includes the following elements:

• Collecting basic contact information about the business, including key personnel who would be involved in dealing with a property damage restoration company in the event of a disaster.
• Gathering information about the structure, including layout, entrances, exits, elevators, stairwells, office space, IT and data centers, breakrooms, bathrooms, sales floor, production areas, warehouse and storage areas, electrical panels, water main shutoff valves, equipment, chemicals, etc.
• Reviewing and assessing the emergency readiness plan. If the plan needs updating or adjusting, the restoration is experienced and competent to make recommendations that will facilitate a rapid response and a quick cleanup and restoration process in the event of a property damage disaster.

2. The restoration company is reputable, bonded, licensed, and insured. Technicians are trained, certified, and experienced.
3. The restoration company has a rapid response and quick cleanup process. A rapid response avoids unnecessary advanced secondary damage. A quick cleanup and restoration process enables the hotel to resume normal business operations sooner rather than later. A water damage disaster in a hotel may involve dozens of rooms and multiple floors. A qualified damage restoration company must be able to scale to meet the challenges a business presents, such as a hotel, apartment complex, or professional office complex. The restoration company should utilize the latest equipment, advanced cleaning techniques, and EPA-approved disinfecting and sanitizing products.
4. The cleaning and restoration company should be comfortable and competent working with the insurance company. In fact, better companies can handle the commercial claims process from end to end.

SERVPRO of Carrollton emphasizes the importance of the pre-qualification process and walks the client through the entire process so that when a disaster occurs, only one call is needed to secure the cleanup and restoration services. The local SERVPRO franchise can immediately scale for a significant disaster loss by tapping into the expansive franchise network of local and regional SERVPRO service providers.

When water damage, fire damage, smoke damage, or storm damage disaster strikes a hotel or apartment complex, SERVPRO of Carrollton can provide the rapid response and quick cleanup necessary for a business such as a hotel to resume normal business operations. Available 24/7, 365 days a year, including holidays, SERVPRO of Carrollton is the cleanup and restoration company businesses can trust to handle their property damage disaster recovery needs.

For more information about water damage restoration services for residents in and around Carriage Hill, Plano, TX 75023, contact SERVPRO of Carrollton at (972) 446-0383 or at office@SERVPRO10952.com.