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Lack of flood insurance heaps misery on homeowners slammed by Hurricane Florence

10/3/2018 (Permalink)

The drenching rains and massive flooding caused by Florence are expected to inflict a high financial toll on homeowners in North Carolina and other states, as only a small percentage are covered by flood insurance that could help offset the costs of rebuilding their damaged homes.

An estimated quarter of a million homes in North Carolina are projected to be affected by Florence, which has caused flash flooding and record rain amounts across the state, according to CoreLogic, a property analytics company. 

Estimates from insurance analysts and actuaries show an alarmingly high percentage of homeowners – both in coastal towns and those far inland – that are underinsured for a water-driven natural disaster as destructive as Florence. 

Only 10 percent to 20 percent of coastal homeowners in the hard-hit eastern part of North Carolina, for example, have coverage through the government’s National Flood Insurance Program (NFIP), and only 1 percent to 3 percent of homes in inland counties have flood policies, according to estimates from John Rollins, an actuary at consulting firm Milliman. Statewide, roughly 3 percent of the homes in North Carolina have flood coverage and 8 percent of homeowners are covered in South Carolina, Rollins said.

“Obviously, that leaves a lot of people uninsured,” Rollins told USA TODAY.

The numbers of those covered are low, he said, because people think that because their home isn't in a high-risk zone designated by the government that there's "zero risk" of a flood. "But that's not true," Rollins says. Many also don't realize their basic homeowners policy doesn't cover flood damage, while others overestimate the disaster aid they will get from the government. 

Unfortunately, standard homeowners insurance won’t cover any flooding-related issues. The estimated insured losses from Florence are in the range of $3 billion to $5 billion, according to CoreLogic. Goldman Sachs, a Wall Street bank, said they could go as high as $10 billion to $20 billion. 

Insurers should have no problem being able to pay out claims to policy holders because the industry has cash reserves of roughly half a trillion dollars, according to Matt Carletti, senior insurance analyst at JMP Securities.  

More Money: What you need to know about flood insurance as Florence dumps rain on Carolinas

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The problem for homeowners is that insured losses generally are only about one-third of total economic losses, which puts them on the hook financially for a more sizable part of their home rebuilds if losses are due to uncovered flood costs, Carletti said.

To get flood coverage, homeowners must buy a separate policy. Most purchase this extra coverage from the government-backed NFIP program, which is designed to restore your home to its preflood condition and replace your possessions. NFIP policies, which carry average premiums of about $600 to $700 a year but can run into the thousands of dollars in high-risk zones, cover up to $250,000 for a home's structure and up to $100,000 for personal possessions. 

Homeowners not covered for flood damage can seek federal disaster assistance in the form of grants from the Federal Emergency Management Agency or apply for a loan from the Small Business Administration, said Steve Bowen, meteorologist for Aon Benfield's Impact Forecasting division. FEMA may provide up to $33,000 in assistance for home repair, although the average for Superstorm Sandy in 2012 was about $8,000 and roughly $7,100 for Hurricane Katrina in 2005. 

At the end of July, there were 134,306 active NFIP flood policies in place in North Carolina, Bowen said. That's only 3 percent of the estimated 4.62 million housing units in the state, he said, citing U.S. Census Bureau data.

Damage to homes caused by floods tend to be costly. The estimated potential loss for a 1,000-square-foot, single-story home with possessions worth $20,000 that is inundated with just 1 inch of interior water can run as high as $11,000, according to FEMA data, and the estimated loss for 5 inches of water climbs to more than $18,000.

Given the fact that many parts of North Carolina have received rain totals of 2 feet or more, many homeowners will be facing high rebuild costs they may not be able to afford.

“You are looking at a lot of homeowners that will have out-of-pocket costs that could easily be five figures, or more than $10,000,” said Cathy Seifert, an insurance analyst at CFRA, a Wall Street research firm. 

Insurance coverage for drain, sewer and sump pump problems

10/3/2018 (Permalink)

Analysis brought to you by the experts at FC&S Online, the recognized authority on insurance coverage interpretation and analysis for the P&C industry. To find out more — or to have YOUR coverage question answered — visit the National Underwriter website, or contact the editors via Twitter: @FCSbulletins.

Question: This is a Commercial Property risk. I have a toilet that continued to run as the toilet stopper did not seal properly. All would be fine except the heavy rains saturated the drain field not allowing the water to drain from the toilet. This resulted in an overflow causing damage.

The insured has a $10,000 limit on discharge from sewer, drain, or sump from a CP 73 51 endorsement.

Does this limit apply or would it be considered a loss under the normal limits? But for the saturated drain field, there would be no loss. The drain field caused the water to not be able to drain properly; is that a back-up by definition?

— North Carolina Subscriber

Answer: Endorsement CP 73 51 is a proprietary endorsement that includes additional coverage for Discharge From Sewer, Drain Or Sump (Not Flood-Related), up to a $10,000 limit in the endorsement. This response is in regards to the water damage claim submitted for our review. Here are the facts as presented:

  1. A toilet ran continuously due to a stopper that did not seal properly. The toilet overflowed.
  2. The drain field overflowed due to heavy rains.
  3. The drain field is tied to the septic system serving the insured property.

Based on these facts, there are two causes of loss, and we cannot determine the extent of damage from each cause of loss:

  1. What caused the toilet stopper to not seal properly? Was it wear and tear or faulty workmanship? What interior water damage resulted from the toilet overflow?
  2. What caused the drain field to overflow? Despite heavy rains, it should still have absorbed the water. So what factors may have contributed to the drain field overflow? Was sludge or other obstruction a contributing factor? What interior water damage resulted from the drain overflow?

This is not an expert opinion, just personal experience with a broken toilet flapper. Regardless of how much the toilet ran, it never ran outside the toilet bowl because the drain carried out the water. If the drain was stopped up, not allowing the water to flow through the drain, then the water could back up and out from the toilet bowl, causing interior water damage.

If the water damage was caused by the broken toilet seal, there would be no coverage.

If the water damage was caused by the drain field overflow, then there would be limited coverage of $10,000 for Discharge From Sewer, Drain Or Sump (Not Flood-Related) provided in the proprietary endorsement CP 73 51.

However, this is an issue of fact, not coverage. We can only speak to the coverages that would be provided in the forms based on the two causes of loss as presented.

Washing machine overflow

Question: Our property coverage contains an exclusion for flood. Included under the flood definition is the exclusion of water or sewage that backs up through sewers, drains or sumps. It also excludes overflow of any body of water.

We have a claim where the fire department put a load of clothes in the washing machine and was called out on a run. During the washing cycle, water overflowed into the building due to the drain being frozen from an ice storm. This was while the firefighters were gone performing their duties. When they returned, the building was flooded, damaging carpet and sheet-rock. Is this covered?

— Oklahoma Subscriber

Answer: We do not see an exclusion that would apply in this situation. It doesn’t sound as if the water actually went down a drain and then backed up. The washing machine overflowed because water could not go down the frozen drain, which would not constitute a backup. So, in our opinion, the loss is covered.

Sump pump and water backup

Question: One of the more common claims we handle deals with sump pumps and applicable exclusions. In this case, the business owner’s policy contains the following provision, “We will pay for loss or damage to covered property caused by water that backs up from a sewer or drain, subject to the following limitations:  We will not pay for loss or damage under this Additional Coverage caused by the emanation of water from a sewer or drain that itself is caused by, or is the result of “flood,” surface water, waves, tides, tidal waves, overflow of any body of water or their spray, all whether driven by wind or not;”.

Carrier issued a denial, as follows:

In view of the cited exclusions, the water damage to the basement is the result of flood and groundwater; therefore, we would not make a payment for this loss.

The loss was not caused by flood or surface water, but a high water table that overwhelmed the pump’s capability to function due to two major rain events one year ago. When the water table receded, the pump functioned so it was not failure in the sense one thinks of failure, i.e., mechanical or electrical. Water entered through the sump, through some cracks in the floor.

My belief is that this is a covered loss. I could not find any information on the definition of “sump pump,” the purpose of a sump pump, or the definition of “groundwater.”

The carrier used the term “groundwater” in the denial. That is not addressed in the endorsement.

— Connecticut Subscriber

Answer: It does not sound like the water backed up through the sump pump but in fact came through the cracks in the floor.

This type of loss would be subject to the part of the water exclusion that states, “Water under the ground surface pressing on, or flowing through… floors… basements.” (This can be seen in the ISO BP 00 03 01 10, B.1.g.) If the insured has purchased sewer and drain backup coverage, it would not apply to this type of loss. However, if it can be shown that the water really did overflow or was discharged from the sump (as opposed to seeping in through floor cracks), that would be covered.

The ‘whys’ behind lack of flood insurance coverage

10/3/2018 (Permalink)

One of the ongoing issues with hurricanes and other flood disasters is the fact that many, many people lack flood insurance. But why is that? Why are people not buying the coverage they need?

The Private Risk Management Association (PRMA) conducted a survey of agents about why their insureds do or do not carry flood insurance. We had the chance to talk to Lisa Lindsay of PRMA about the study and its results.

Their study showed that across the board, whether high net worth or not, people’s mindset is that “It won’t happen to me.” Flood insurance is seen as something homeowners are required to have, not something they need to protect their assets. The study showed that many people only buy flood insurance because the bank says they have to. They later celebrate when they’re no longer required to hold flood insurance because their mortgage has been paid off.

Likewise, consumers have been conditioned to believe that unless they are in a high-hazard flood zone, coverage is not needed. The fact that flooding occurs in many non-high hazard areas is overlooked. It’s not just coastal areas that flood, but areas near rivers, streams and even low-lying areas in towns where runoff can accumulate often flood, causing unsuspecting homeowners damage that’s not covered by their normal homeowners’ policy.

Better understanding of mitigation efforts

Not only do people need a better understanding of flood insurance, but they also need a better understanding of mitigation efforts, that is, steps they can take to prevent or minimize flooding and reduce the potential damage. Sandbags, inflatable barriers and landscaping are just some ways people can prepare for a flood. Both the National Flood Insurance Program (NFIP) policy and the new ISO Personal Flood Policy provide up to $1,000 for steps taken to protect the insured building from flood or imminent danger of flood. The $1,000 is provided for the cost of:

  • Sandbags and sand to fill them,
  • Fill for temporary levees,
  • Pumps,
  • Plastic sheeting, and
  • Lumber used in connection with these items.

As most insureds don’t read their policies, it’s likely that most are unaware of these coverage benefits for mitigation of damages.

Private flood policies to the rescue?

With the concern surrounding the National Flood Insurance Program (NFIP), carriers are beginning to issue private flood policies. For example, one carrier has a private flood policy with limits up to $15 million on property, much higher than the NFIP limits of $250,000.

ISO has developed both a Commercial Flood program and a Personal Flood program, both available this year. The expansion of available coverage should be a tremendous help in getting homeowners insured. However, education of agents and the public is key.

Better analytics is helping to make private coverage possible; instead of just referring to the standard flood maps, which may be out of date, there are companies providing better analysis of property that includes rainfall, local topography, elevation and susceptibility to hurricanes, not just for rains but for winds and storm surge as well.

Although flood insurance can be expensive in some places, in many areas that’s not the case. As a result, property owners don’t investigate their options for coverage.

Another issue is construction itself. Builders resist changes to codes to make properties safer while continuing to want to rebuild in areas that have been flooded. If building is going to occur in such areas, the buildings need to be built in a way to protect the property as much as possible from flooding. People also get a false sense of security from the fact that the town has allowed buildings to be constructed in low-lying areas, figuring that if zoning approved of the area it must be safe to construct a home in that area.

Understanding the 100-year flood

Yet another large issue is the misperception of the 100-year flood. Many people believe that this means that the chance of their property being flooded is one in 100 years. What it really means is that every year there is a 1% chance of flood. This puts the property at significant risk, as not only do 100-year storms need to be accounted for, but other storms as well.

Time Period10 Yr.25 Yr.50 Yr.100 YrTotal Odds1 yr.10%4%2%1%17%10 yr.65%34%18%10%127%20 yr.88%56%33%18%195%30 yr.96%71%45%26%238%50 yr.99%87%64%39%289%

Source: FC&S Online

The overarching issue is how to educate both the public and the industry on flood mitigation techniques and the availability of insurance coverage. The industry needs to inform people of not only what their risk is but also about the available risk evaluation tools, mitigation techniques and available coverage. Agents and brokers need to be well informed in order to proactively change the narrative of flooding and coverage.

It's Your Business: Fire Prevention & Recovery

10/3/2018 (Permalink)

What If a Fire Strikes?
Despite everything, a fire can strike. Being prepared will help reduce its devastating effects. The first few minutes following a fire are the most significant; any inappropriate action or inaction at this stage can have far-reaching consequences. Just as the appropriate first aid applied immediately after of an accidental injury can save life and promote rapid recovery, the correct response to a fire can keep effects minimal.

When a fire occurs, notify the fire department, the police department, and the insurance company. Next, call a disaster restoration company to help prevent further damage. Because fire departments usually do not recommend specific disaster restoration professionals, a business should reference its contingency plan or contact its insurance company immediately to ascertain the restoration company to call, and then work with that company to minimize damage and business interruption.

By evaluating the materials and surfaces affected, a disaster restoration company can provide an understanding of the fire's chemistry and allow for a targeted, informed restoration effort. Even though each fire's chemistry differs, one of the most important things disaster restoration companies do immediately is wipe down the affected areas to avoid further damage caused by humidity and acidic residues. They will use air scrubbers, which are highly filtered air machines, so soot particles will not recontaminate air and will limit redistribution of contaminated particles while restoration work continues. They will pull all filters from the HVAC system, clean and recondition the system, and then install new filters.

A fire can involve well more than 100 chemical elements. A fire at a business is usually a complex fire, the result of incomplete combustion and fueled by synthetic materials, including those found in carpets, furniture, plumbing, and other equipment. Complex fires cause the most damage and leave the most waste, but disaster restoration professionals can professionally handle the cleanup and restoration.

How small businesses can better protect themselves

10/3/2018 (Permalink)

Even the best-run small businesses face the risk that external factors beyond their control, like a natural disaster, could derail operations.

recent joint survey conducted by Insureon and Manta revealed that approximately 60% of small business owners don’t have either a formal disaster recovery plan or business interruption insurance, both of which could help them bounce back if an unforeseen event like Hurricane Florence forces their business to temporarily close.

Natural disasters are unpredictable such as the recent wildfires in California are unpredictable. Out-of-control fires in Yosemite threatened the livelihood of small business owners in the hospitality industry, with one innkeeper estimating a loss of at least $20,000. Other local businesses, such as guided tour and day trip operators, faced the possibility of serious financial losses and the need to dip into savings to cover operating expenses.

While a disaster recovery plan won’t completely insulate small businesses from problems caused by Mother Nature, a well-thought-out strategy can help minimize the impact. In addition to purchasing commercial property insurance to help pay for repairs to damaged property, business owners should also consider buying a business interruption insurance policy. Not only can it help expedite recovery from a disaster, it can also minimize a business’ financial losses.

Developing a comprehensive disaster recovery plan

In the event of a natural disaster, small businesses may be forced to temporarily close. Unfortunately, not all businesses are equipped to survive a prolonged shutdown. According to the survey, 31 percent of owners don’t know if their companies would be able to resume operations if they had to close for longer than one month, with an additional 13 percent confident that they would definitely not be able to reopen. However, only 39 percent of small business owners surveyed said they have a formal disaster recovery plan in place.

Disaster recovery plans can help business owners act fast to protect their company’s infrastructure and get the business back up and running as quickly as possible. Some information to consider including in a recovery plan includes:

  • A list of key contacts, such as the insurance company, utility companies, suppliers and financial institutions
  • A detailed plan of what steps employees should take in the event of an emergency
  • A communication plan for notifying customers and vendors of the closure
  • Documents and resources that are critical to the business’ operations

To keep everyone in the loop, employers may want to review disaster recovery plans with employees during on-boarding, and hold annual emergency response drills.

Why add business interruption insurance?

Companies face more than just physical damage from natural disasters; they also experience financial losses from being forced to halt operations for a period of time.

While property insurance can pay to repair building damage caused by a wildfire, business interruption insurance covers the potential income lost during a temporary closure. These payout amounts are usually based on income and expense records, so business owners should carefully store copies of these documents in a safe, off-site location.

Business interruption insurance can vary from policy to policy, but typically provides coverage for the following three things:

  1. Profits an owner would have earned if the business was not forced to close
  2. Normal operating expenses, including employee wages, taxes and loan payments
  3. Temporary relocation expenses, such as moving and rent costs

Business interruption insurance usually will not cover costs related to utilities, income that isn’t properly documented and losses caused by a partial closure.

Some policies might not protect against every natural disaster. For example, if events like wildfires are not covered by a proprietor’s property insurance policy, their business interruption policy won’t cover expenses related to wildfires either. For total protection, proprietors should verify with their insurance carriers that their policies cover common natural events that are specific to their geographical vicinity.

Above all, small businesses can best prepare by taking a proactive approach to disaster recovery planning. In the absence of a plan or adequate insurance, small business owners are putting themselves at risk for significant financial losses that could force some to permanently close. With the right combination of preparedness and comprehensive insurance, business owners can ensure they are ready for anything Mother Nature throws their way.

Disaster recovery for agents, brokers & claims professionals

10/3/2018 (Permalink)

A hurricane is coming. You’ve implemented your business’s emergency preparedness plan. You’ve boarded up your brick-and-mortar location in the storm’s path. You’ve ensured your staff’s safety. You’ve secured your CRM data at an offsite, low-risk location (or in the cloud), and armed your staff with printouts just in case. You’ve mobilized your claims workforce. And you’ve prepared your clients with disaster-specific risk mitigation and claims reporting information.

But are you ready for what comes next?

After a weather-related catastrophe passes, agents, brokers and claims professionals must be prepared to ride out the next storm: the onslaught of claims. In 2017, Hurricane Harvey resulted in nearly 670,000 combined personal and commercial property insurance claims to private insurers, the Texas Windstorm Insurance Association and the Texas Fair Access to Insurance Requirement Plan, according to the Texas Department of Insurance. All those insureds expect a prompt, professional response, and rightfully so.

Here are seven tips to help you get back to business with minimal interruption.

1. Keep an eye on the weather

Large storms seldom follow their forecasted track. Watch for changes in weather patterns and reach out to high-risk insureds — such as large car dealerships or marinas — that might be impacted by a sudden shift in the storm track, so they can relocate their assets if possible and take all necessary precautions.

Then, stay in touch with emergency management officials. To provide timely outreach to your clients, you’ll need to know when roads will re-open and when it will be safe to bring claims representatives into the area.

2. Set up temporary offices

Today, power outages from storms don’t bring businesses to a halt. Wi-Fi hotspots mean your insureds may be able to stay connected with their mobile devices. You should too. For agents and brokers, this may mean working “virtually” — from homes, hotel rooms or coffee shops — rather than finding a temporary brick-and-mortar location. Claims professionals (especially CAT adjusters) are accustomed to finding Wi-Fi hotspots wherever they go so they can determine coverage, assess damages and resolve claims without interruption.

3. Mobilize your claims force

Start to determine how many claims professionals you’ll need on the ground to assess the damage. Know the physical location of CAT adjusters and how to contact and deploy them as needed so they can reach out to your clients and help them calculate property loss and business interruption loss.

4. Determine your priorities

For agents and brokers, making sure your clients are safe and handling their first-notice-of-loss response will be your two biggest business priorities in the immediate aftermath of a storm. Determine what your staff can handle, and what they can’t. Small or mid-sized retail agents or brokers may ask their clients to report claims directly to the carrier. The agent or broker should also understand all their carriers’ documentation and estimate requirements for clients who sustained smaller losses that don’t need to be inspected by the carrier. In any event, the agent or broker will still need to follow up on the progress of all claims.

It’s also important to be aware of carrier binding suspensions, state moratoriums on non-pay and other cancellations, and other guidelines, procedures and processes that might be disrupted by the weather event.

Another option may be to outsource some of those critical business functions to an external vendor that specializes in insurance operations and business process management. If you’re already working with such a vendor, this is a natural next step. If you’re seeking such a vendor, look for one with offshore and on-shore capabilities and practical business continuity plans not tied to a physical location that can help you minimize business interruption.

5. Keep your insureds informed

This is where an agent or broker’s online presence will pay major dividends. Use your website and your social media channels to let your insureds know you’re back in business, who to call, where to submit claims, and how to contact you, your staff and their carrier.

6. Rely on your data

Gather analytics around the property or assets you insure and track the potential loss. For example, if you know you insure 1,000 homeowners who were in the swath of the hurricane, you can calculate the potential impact beforehand, and then re-calculate based on the storm’s actual path. This will give you the data you need to comprehend the number and severity of claims you and your staff may be handling.

7. Plan better the next time

No matter how well you plan, the days after a weather catastrophe will be frenetic. But proper planning will help you ensure business continuity.

I spent 20 years working in carrier claims departments, and have been a part of organizations helping people recover from serious storms since Hurricane Gloria hit New York City in 1985. One of the biggest lessons I’ve learned is that the right time to help in a natural disaster is both before and after.

In the days after Hurricane Harvey, we at ReSource Pro offered our clients help with their priority work, for example. We rerouted our impacted clients’ calls to our on-shore center and handled loss reporting calls, and we followed up with carriers and insureds to confirm adjuster assignments. We leveraged offshore locations to handle first-notice-of-loss data entry for impacted clients.

Although that helped clients after the storm, helping clients prepare for the next storm is just as crucial. That’s why I advise our clients that, when you work with external vendors, ask them to do a portion of work on a regular basis. If you anticipate asking a vendor to handle first-notice-of-loss data entry during a storm, having them do a portion of that work with some frequency during normal business operations ensures a smooth transition — and familiarity — with the work during an emergency.

This will ensure your external strategic partner knows your processes, understands your clients, and is prepared to offer seamless support when catastrophe strikes. You’ll gain a level of confidence in your business partner that will keep your clients satisfied, which in turn will become a key differentiator for your agency or brokerage.

Ask Annissa: How Do I Handle Sensitive Documents Damaged in a Fire Loss?

9/10/2018 (Permalink)

What’s the best way to handle and clean personal papers in a fire loss that have been damaged by soot and also smell? The homeowner wants to keep them and won’t let me throw them away.

Personal papers like bills, canceled checks, credit card statements and everyday magazines have no value in the eyes of the insurance company and they often don’t want to pay for them to be cleaned or deodorized. However, they often have value to the homeowner.

The biggest problem with this is that paper can hold a lot of odor and may re-contaminate the house once everything is unpacked. So first off, we check with the homeowner and see if the paperwork is something that they can live without. Or is it really important and needs to be kept? Once you explain that the papers can hold a lot of odor and may cause recontamination of the house and belongings, this will sometimes make the homeowner more aggressive about putting them in the round file.

If the paperwork cannot be parted with and must go on the “keep it list,” then we dust them off and organize them into a large 11x14 inch spec bag. This is a heavy duty plastic bag that keeps the odor and contamination contained until the homeowner can photo copy or reprint the documents they want to keep. The cost to the insurance company to handle them this way is really no more than their cost would be to throw them away, so this keeps your adjuster and homeowner happy.

This also allows the homeowner to go through the papers at their convenience as they are dealing with a lot of pressing decisions in the first few days after a fire. Having one less pressing thing to have to handle right away can be a huge relief for them.

Selecting the Proper Drying Equipment for Commercial Restoration

9/10/2018 (Permalink)

In May we looked at the different players in the commercial market. This time we will delve into the twisted and somewhat misunderstood world of equipment. Many restorers still use the “WOT” method of equipment selection, as in “Whatever’s On the Truck.”

I want you now to consider the “WHAT” method, as in “Whatever the Project Requires.” Have you ever lost a bid when you were sure you charged less per day for air movers or labor than anyone else? You may have thought someone had the inside track and maybe so, but most likely you lost the bid on the total bottom line, not on just the bid price. 

As we discussed, it is the occupant that pays rent to the owner, who then pays the bank and insurance. So if we keep the tenants happy, we have a better chance of keeping everyone pleased. A successful selection of equipment and deployment depends on the parameters of the job not what you have on hand. 

So what are the parameters? How do I get to the total bottom line? Once again, Zig Zigler says it the best: “You can get what you want if you just help enough of the right people get what they want.” 

We now know who the right people are; we just need to provide them with a finished project with as little cost and interruption to their services as possible. This is what they want. 

 

Imagine a disaster has just struck your business: fire, flood, earthquake, tornado or maybe like me by a little hurricane called Katrina. After making sure everyone is safe, what are your concerns about your business? Can I stay open? Can I get supplies from my vendors? How long will it take to get the place back together? How are we going to pay for it all? 

Our job is to help answer these questions and provide the best overall solution. This is Bottom Line Drying. What we need to do is combine these concerns and needs with equipment available on the market to produce the best result. The fundamentals of drying dictate that adding energy (heat) to a material while passing the driest available air over its porous surface will invoke evaporation of unwanted moisture from the material and thus the building itself. We call it HAT (Humidity, Airflow and Temperature). 

(I like “HATE” better. The E stands for Evaporation, but I don’t want to be the one called out for preaching hate in this day and age. But it is probably OK to HATE water – it doesn’t have much of a lobby in Washington!) 

Seriously, let’s look at the parameters individually and deploy equipment accordingly. 

The first is, can the business stay open? This is determined by structural integrity: Is it safe for occupancy? Can the occupants vendors supply the occupant with the materials or services needed in order to conduct business on a day to day basis? Is there Business Interruption Insurance? 

This is of primary concern, because the occupancy of the building is one of the most important factors when developing an allowable temperature range. If people are going to be in the building shopping, eating or working, then noise and temperature level – as well as equipment visibility – are important considerations. So large equipment located away from customers, with air movers on low, and comfortable temperatures are best. You may even need to constantly relocate air movers for aesthetic reasons. 

Make sure everyone involved is on the same page

By the way, a hot-air drying unit works fine here if it is cool and dry outside, or you can use localized or “spot” heating for specific, tough-to-dry materials. If the business will be closed for a few days, we do not have creature comfort or visibility concerns, but we have to check on materials and products in the building before we allow for elevated temperature drying (generally above 80 F). 

The building’s design is the second most important consideration. You must understand, this consists of the building’s construction materials and physical layout as well as the contents. Most building materials have no problems handling temperatures up to 120 degrees and most materials, especially the denser or less permeable, actually dry better in these higher temperatures. 

Please be careful on total temperature (air or material), because sprinkler systems are part of many commercial buildings and their heads are designed to rupture on temperature, not from sensing flame, and some are rated as low as 130 degrees. (How good is your liability insurance? Want to find out?) 

The contents are a mixed bag of every material you can imagine, and many are sensitive to temperature or even low humidity – operational computers or server rooms are obviously concerned with high temperature, but low humidity may induce static discharges into the system, doing serious damage. 

You need to consult with the occupants and building engineer about temperature- or humidity-sensitive items, and get them to sign off on any elevated temperature drying so you will not be held responsible for something you did not know was there. 

The layout generally determines air mover placement and quantity, but it also very important to the drying system selection: LGRs, desiccants or heat-based systems. Here, the general guidelines are simple: it is much cheaper to rent one big piece of equipment than many smaller pieces, thus decreasing the bottom line. 

This is why many commercial projects that have large common areas or hallways use desiccants or larger trailer-mounted heating systems. But if the layout is one of multiple exterior entrances (1,000- to 3,000-square-foot individual units) like condos or hotel rooms, LGR’s are going to be the fit. Layout also includes site access and power availability, as they are also major determining factors, as well as what equipment happens to be available when you need it (as much as I hate to say it, sometimes “WOT” is all we have to work with). 

Use the right equipment to suit the project’s needs

Then there is the Question of All Questions: “How long is it going to take?” “It will be dry when it’s dry” is true, but that’s not what I mean. Lately, a lot of focus has been on drying as fast as possible, and that is great in the residential or commercial market when the building is unoccupied, but when a commercial customer needs his facility to conduct business, being out of business even for two days can be unacceptable. 

Businesses such as restaurants and hotel ballrooms have planned functions. Since Mrs. Jones will probably have only one 50th anniversary party, are you going to tell her she can’t have the party tonight? Many times you can dry the carpet/flooring in several hours, have it safe for the party and start the wall drying after hours, when the guests have left. 

In this case, you are going to spend a few more days drying with increased equipment billing and labor hours, but there would be no business interruption payout, again making the bottom line lower. I call this “Ghost Drying” because you are constantly working on the wet structure, but anyone who uses the facility hardly even notices you are there. You have just made the insurance company, the building owner, the occupant, and Mrs. Jones very happy. 

The last word in drying is communication: Be sure that when you are bidding on a project that the owner, tenants, insurance folks and all of your people are on the same page. Just because you know the benefits of how you custom tailored this drying project for them does not mean they understand it. 

It is important to start every bid submission with a meeting of all concerned and continue with these meetings on a daily basis until the project is complete. This openness in working together as well as showing concern and understanding for all involved will make you a successful Bottom Line Dryer.

The Anatomy of a Fire: Understanding 3 Types of Fires & Effective Cleaning Techniques

9/5/2018 (Permalink)

According to the National Fire Protection Association, it’s estimated that some 370,000 home fires occur each year, costing close to $7 billion in total property damage. In many of these home fires, however, the fire starts and is contained in a certain area of a home or business. Even though containment eliminates the necessity for complete demolition and reconstruction, it is still necessary for proper cleaning of soot and smoke to commence, in order to restore the property to a preloss condition. Anatomy of a FireContrary to what many may believe, there is more than one type of fire — and the type of fire that occurred will dictate the appropriate cleaning method. The most prevalent types of fires are: high-oxygen fires, which produce dry soot; low-oxygen fires, which produce greasy, wet soot, and kitchen fires. Here’s a closer look at how to clean each type of fire:

  • High oxygen: Dry sponges are a must. Follow this by applying a low-alkali detergent and then rinse thoroughly.
  • Low oxygen: Use high-alkali detergents along with warm water to wash the walls and structures. Rinse, then paint over.
  • Kitchen: These are often the most challenging fires to clean, as soot residue is difficult to detect. For this reason, cabinets, drawers and other appliances often need to be removed to adequately clean the area.
General Cleaning TechniquesSmoke and soot can penetrate paint, carpet, upholstery and clothes. While carpet can be deep cleaned and clothes can be taken to the dry cleaner, properly restoring walls, structures and objects is a different story. Here’s a look at some general cleaning techniques:
  • Personal protective equipment: Gloves, a protective mask, long-sleeved shirts and pants should be worn on site to minimize contact with ash.
  • Remove contents: Remove contents from the house. While some contents may have to be discarded, others can be effectively hand cleaned. Cleaning contents in an ultrasonic machine is also an option with some items.
  • Ventilate: Open windows and doors to remove odor.
  • Beware of other contaminants: Lead and asbestos can turn a fire restoration job into an environmental restoration job if they’ve become disturbed.
  • Hand scrubbing: Fire damage work is one of the most tedious types of repair work. It involves a lot of handwork, such as scrubbing walls and structures with sponges — and using chemicals and specialized restoration equipment, such as media blasting tools, in the event of heavy residue.
  • Duct cleaning: Following restoration, a duct cleaning is required. That’s because smoke and soot have a tendency to become trapped within a home or business’s duct system. This can spread contaminants — and odors — to other areas of the home when in operation. Hence, a professional duct cleaning is necessary.
Techniques for Various Materials
  • Clothes and fabrics: A specialized dry cleaner is capable of restoring these items to preloss condition. Cleaning soot-contaminated clothing is somewhat of a science, and while a homeowner may be able to adequately restore clothing on his own, it’s always best to leave this to the professionals.
  • Carpet: A professional carpet cleaning is a must in order to effectively remove contaminants and odor from the carpet.
  • Building materials: Dry chemical sponges are your best bet for wallboard, plaster, wood and wallpaper. These will remove much of the soot and also prevent it from being lodged deeper into the material.
  • Other materials: Sponges, towels and mops are ideal for cleaning tile, glass, metal and certain appliances. Since these aforementioned objects are less porous than drywall, for example, it’s OK to use a wet or dampened sponge or cleaning tool. Plus, there’s no risk of lodging contaminants deeper into the material.
  • Specialty cleaning tools: Ultrasonic cleaning machines can come in handy as they can adequately clean non-porous items quickly and efficiently, compared to hand cleaning.
When it comes to a fire damage situation, you also need to remember how vulnerable the homeowner is in the situation. While any type of home catastrophe is never welcome, a fire has the potential to be the most devastating. With that in mind, also be sure to work on your customer service skills, communicate effectively and regularly with the homeowner to determine his needs throughout the process, and keep him up to speed on the project’s progress. Where a water damage situation can be restored in as little as three days, it’s not uncommon for a fire damage situation to last several weeks — or even months if reconstruction is involved. Hence, proper cleaning and handling of a project is all the more important.

Business Owners Find Varied Paths to Recovery Post-Disaster

9/5/2018 (Permalink)

As small business owners in Hawaii and California clean up following Hurricane Laneand wildfires, they’ll find there’s no one formula for recovery.

The same disaster can devastate businesses in divergent ways – a hurricane might tear the roof off one restaurant, flood another and leave a third with little damage.

 

Whether a business recovers often depends on how prepared it is, such as whether it has insurance and its computer data is backed up remotely. Owners should also find out what resources are available to them from the government, their communities and other entrepreneurs, says Craig Markovitz, a professor of entrepreneurship at Carnegie Mellon University’s Tepper School of Business. Communication with customers and vendors is also crucial, Markovitz says.

“Let people know you’re going to get back on your feet,” he says. Anything from a sign on a company’s premises to advertising to media coverage will help.

Markovitz also advises owners to rally their entrepreneurial spirit, which helped them succeed in the first place.

Here are the stories of business owners who were able to recover:

OWNER: Patrice Farooq, Cupcake Kitchen Houston

 

THE DISASTER: Hurricane Harvey, August 2017

When Houston was inundated by over 4 feet of rain in four days, Farooq’s bakery was damaged by water that entered through the roof. She lost appliances including a commercial freezer and all her perishables including eggs and dairy products. Farooq estimates her losses at $30,000, and she was shut for about three weeks.

THE RECOVERY: Even as she was first dealing with the damage, Farooq began using Facebook ads to let customers know she’d be reopening, and to ensure they didn’t forget about her shop.

“I had an idea that the (customer) traffic was not going to be the same and we would run the risk of going out of business,” Farooq says.

Farooq kept advertising after she reopened, and revenue had returned to about 80 percent of pre-Harvey levels by January. But because the neighborhood was still rebuilding, Farooq decided to move the store five miles away, opening in May. Revenue is now 50 percent above the level of before the storm.

OWNER: Nate Stokes, Visiting Angels senior care franchise

THE DISASTERTornado; Joplin, Missouri; May 22, 2011

The tornado destroyed Stokes’ cars and his office, which no one was in when the twister hit, and he later learned that his accountant had been killed. Stokes saw the area the next day; it was acres of rubble.

“If you had blindfolded me and brought me there, I wouldn’t have been able to tell you where we were,” he says.

Three of 50 employees had to quit because they lost their homes and needed to focus on rebuilding their lives. Three more were temporarily unable to work. He lost several clients whose homes were destroyed.

THE RECOVERY: Stokes’ church offered him office space, and the Visiting Angels franchise in Tulsa, Oklahoma, lent him a car and computer. About a month after the tornado Stokes found an office 12 miles away, in Carthage, Missouri, but he was unable to replace all his lost equipment and cars until he received insurance money six months later.

It took about a year for Stokes’ business to return to its pre-disaster functioning. He’s still based in Carthage but now has a satellite building in Joplin.

OWNERS: Brent and Juan Reaves, Smokey John’s BBQ restaurant

THE DISASTER: Fire; Dallas; Sept. 9, 2017

Wood stored near a meat smoker caught fire, heavily damaging the kitchen, sending smoke into the entire restaurant. It caused no injuries, but the restaurant had to be gutted.

THE RECOVERY: The brothers, who had several catering gigs on their schedule, realized they could still have money coming in by focusing up that part of their business. They quickly found kitchen space where they could prepare food. And other barbecue purveyors were ready to pitch in when they heard about the fire, Brent Reaves says.

“People started calling us and said, ‘Hey guys, if you need smokers, we can help,”’ Reaves says.

With advertising, the catering business soared, helping fund the restaurant’s reconstruction. The rebuilt Smokey John’s will be 1,000 square feet larger to handle the booming catering business, and the Reaves brothers have set a goal of $1 million in catering revenue this year. They expect to reopen the restaurant in September.

OWNER: Brandon Gaille, Gaille Media, internet marketing agency

THE DISASTER: Hurricane Harvey, August 2017

Gaille’s second-floor office became flooded when nearby Lake Houston overflowed. He and his staffers couldn’t re-enter the building for three months – even after the water receded, it left behind dangerous levels of mold. When Gaille was allowed back in, he had to wear a mask.

THE RECOVERY: Gaille and his two staffers and 10 freelancers were able to keep working because most of their documents and records were stored online and could be accessed remotely. So the company had minimal disruption. But last fall, one of Gaille’s employees asked him to consider making the remote work arrangement permanent.

“I don’t want to go back to the office,” the staffer told Gaille.

The move is saving Gaille thousands of dollars a year in overhead – rent, utilities and commuting costs.

OWNER: Bob Tuck, Mr. Appliance, repair company

THE DISASTER: Hurricane Charley; Port Charlotte, Florida; Aug. 13, 2004

The hurricane hit as Tuck was shifting from being a Maytag appliance retailer and repair shop to a Mr. Appliance franchisee, doing only repairs. Tuck was able to move inventory from the store to a warehouse. It took nearly three days before Tuck could travel to the store because of debris and downed power lines. The store, which still had mock-ups of kitchens with appliances, was almost completely destroyed. But the office with all the company’s records was unscathed, as was the warehouse and his inventory.

THE RECOVERY: When Tuck was able to contact the Mr. Appliance corporate offices, the company offered to help him and the community, and told him it would send water and take over his phone lines and answer his calls.

Tuck didn’t try to find another retail space; over the next four months he sold off his Maytag inventory to homeowners who lost their appliances to the storm.

However, there was little demand for appliance repair and therefore little revenue coming in. Tuck’s insurance policy helped cover his financial losses and he also obtained a Small Business Administration disaster loan.

“It was our only means of survival,” Tuck says.

OWNER: Jeff O’Hara, AlliedPRA, event/conference planning company

THE DISASTER: Hurricane Katrina; New Orleans; Aug. 29, 2005

Physical damage at his company wasn’t an issue for O’Hara; it was the city’s overall devastation that for two years wiped out New Orleans’ tourism and convention industries. O’Hara also lost his house. He had to move away from New Orleans for more than a year, getting part-time jobs in Colorado to support himself.

THE RECOVERY: O’Hara worked the phones while he was away, staying in touch with clients, suppliers and tourism officials. He was working to convince people that despite the widespread belief that the city was in ruins, its most popular tourist areas including the French Quarter were undamaged and ready for visitors.

He also traveled around the country, meeting with clients. Even after moving back he worked side jobs, and in 2007, business began to trickle back in.

But O’Hara and the industry faced more problems – the Great Recession hit, devastating the corporate travel business.

“In all, it took seven years to get back to our previous levels of revenue,” O’Hara says