As this is such an important topic; one that requires great attention and detail, the Report Captions section of this series has been divided into three parts.
Report Captions Continued:
In this caption, you need to state in a clear concise manner, the facts associated with the loss adjustment. While this caption needs to contain the story of the loss, do not, under any circumstances, write in such a fashion that it appears to be folksy, conversational, repetitive, or opinionated. Additionally, do not, under any circumstances, attempt to restate anything prepared by an expert you or the client has employed. Refer the client to the expert’s report, along with a comment regarding the summary finding.
Example of Adjustment Caption Verbiage:
We are enclosing sample photographs of the damage. We are also attaching our estimate on the remaining repairs. Our estimate will detail the scope of damage found during our inspection. Sixteen offices, two baths, a kitchen and a long hallway were damaged by water.
Our damage estimate totals $25,188.14 and is based on normal and reasonable unit prices for this area. We believe that the cost for repairs and painting will probably not exceed this amount. Our contact, Mr. McClay, advised that he has an estimate in process for the repairs but has not as yet forwarded it to us. You should note that our estimate is conservative for painting all surfaces and does not include any allowances for moving and/or protecting furnishings. We believe that the insured will get the painting done on only the effected walls and may not expend the entire amount in our estimate.
We Clean Systems, Inc. was used for water extraction and drying. We have a copy of the work authorization but no estimate or invoice has been received to date. We have requested the information from your insured and hope to get it shortly.
Kittleburger Plumbing made repairs to the plumbing and we have their invoice for the repairs. The cost for the repairs was $102.50. Lock Technology was contacted to replace a broken lock cylinder on the front door and rekey another cylinder to match the one on the front door that was broken to gain emergency entry in off hours. The cost was $417.19.
Barclay Electric was used to replace a phone jack and blocked off some floor boxes to prevent additional damage. No invoice has been provided.
At Provencher & Company, we have a separate Business Interruption division, which includes a Forensic Accounting expert that is responsible for managing and reporting on all losses with a BI exposure. That office will work in concert with you, the field adjuster. While the BI staff will conduct a comprehensive interview with the insured and request all financial documentation, we need you in the field to determine the Covered Cause(s) of Loss, establish the Period of Restoration (POR), and initial control of Extra Expense (EE). If there is no suspension of the insured’s business, that should be documented in your report and why. That can be accomplished all in one caption entitled Business Interruption.
Example of Business Interruption Caption Verbiage (no loss of income claimed):
While the insured risk did sustain wind damage to the roof, allowing water to enter into the premises damaging walls and floors, the insured is not filing claim for loss of income. They were able to open immediately and resumed operations working around the affected areas.
If you are assigned a claim that has a BI exposure, please insert the following captions into your report template:
(Refer to the Business Interruption – Interface with the Property Adjuster document for details on workflow)
Cause of loss – Business Income:
For all commercial losses that have BI coverage and either a partial or complete suspension of their business operation has occurred, you must identify and document what cause(s) actuates the coverage. Be brief, clear and factual. Note that most policies require direct physical damage to the insured’s business space, even if not covered property, caused by a Covered Cause of Loss. Even if only the BPP is covered property under the policy, the physical damage to the building will guide both the actuation of the coverage and the period of restoration as long as it was from a covered cause. Note that even if BI/EE coverage may not be apparent, a claim by the insured may be submitted. Therefore, we prefer to be proactive in identifying if a covered cause of loss exists should coverage be found.
Examples of Cause of Loss for BI Caption Verbiage:
The roof of the building, occupied by the insured business, was severely damaged by wind. As a result, the insured’s business suffered extensive water damage to the interior of their space resulting in a complete suspension of their business operations.
While the insured did sustain direct physical damage to their space from wind damage to the roof, the physical damage to the insured’s space is not sufficient to shut down operations. The reason the insured could not operate was due to off-premises power outage which is not covered by this policy.
The insured’s operations were suspended due to wind driven rain, a non-covered cause of loss, which entered the building through an open window.
Period of Restoration – Business Income:
The ‘period of restoration’ is the reasonable length of time necessary to restore full business operations due to the covered cause of loss that actuates the BI coverage. This is very important as you may have an area damaged by a covered cause of loss and other areas damaged by non- covered causes of loss – this needs to be clearly identified as the POR is only established for covered cause(s) of loss.
If the insured is a tenant in the building, we still need to know the extent of damage to the building and length of time anticipated to affect repairs due to the covered cause of loss. This is critical as that will be the governing factor in determining in the length of time for which a business income claim will be considered for payment – not just the time required to affect repairs to the insured’s covered property. The POR is not simply established based on the amount of time the insured is out of operation.
Examples of Period of Restoration for BI Caption Verbiage:
The period of restoration for repairs is three months. However, the insured should be able to utilize the undamaged portion of the building to continue operations, in full or in part, while the repairs are being undertaken.
The period of restoration is six months. Due to the nature of the insured’s business, temporary relocation is not feasible.
The period of restoration is six months, but the insured may be able to relocate the operation to temporary facilities.
While it is anticipated the insured’s operations will be completely suspended for a total of six months, we are only establishing a period of restoration of three months as this is the anticipated length of time necessary to complete repairs resulting from the covered cause of loss. The flood damage to the building is a non-covered cause of loss which is the contributing factor to the extended period of time the insured’s operations have been suspended.
Extra Expense – Business Income:
With the exception of the CP 0050 (specific to EE coverage), most policies that include this coverage limit the use of Extra Expenses to the amount by which it reduces the BI loss. As such, your narrative in this caption must clearly demonstrate the need or prudence for using this coverage.
Example of Extra Expense for BI Caption Verbiage:
The insured will be able to expedite the clean-up process through the use of their employees which will require payroll in excess of normal.
Since the period of restoration is six months, the insured will likely opt to move into temporary quarters in order to preserve their customer base.
Because of the refitting necessary to accommodate their equipment, it is not feasible for the insured to move to temporary quarters. However, the use of expediting expenses for the damaged equipment and replacement of inventory should reduce the period of restoration of six months to a period of suspension of four months.
To Be Done:
In this caption, you need to clearly and concisely tell the client what tasks remain outstanding in order to bring the file to a timely and successful conclusion. If there are multiple items that still remain to be done, this may be best demonstrated in a bulleted format.
Again, you must demonstrate to the client you are in control of the adjustment and have clear direction on how and what needs to be done to bring the case to a timely and successful close. We point this out because this is often where adjusters make a huge leap of faith which can be fatal.
You feel that because you know what you’re doing and what needs to be done, the client feels the same way. Generally speaking, that’s not true or more importantly their boss who may be reading your report may not know you at all. Do not simply state (as we often see) “Please diary your file ahead 30 days for our next report” as that adds no value and more than likely will force the person reviewing the file to write or call you to find out your action plan or even worse, ask for the case be reassigned to expedite closure.
Example of the To Be Done Captioned List Verbiage:
1. Obtain all outstanding invoices.
2. Once all invoices are received, compare against amount allowed.
3. Secure copy of the engineering report.
4. Secure agreed price with insured.
In this caption you will make any necessary recommendations for action on the part of the client. If you are requesting an advance payment, correspondence on their part that needs to be issued, etc. would all go under this caption.
Example of Recommendation Caption Verbiage:
After application of the policy deductible, final payment is recommended in the amount of $1,465.83 as follows (see attached Statement of Loss for details):
Net claim (Advanced) Final Payment
$41,465.83 $40,000.00 $1,465.83
Due to the small amount of existent claim payment due, I would not recommend including mortgagee or the loss payee on final check. Loss was adjusted with Operations Manager, Mr. McClay. Check should be issued in the name of your insured, Stevens & Sons, LLC and sent directly to:
Stevens & Sons, LLC Mr. John Jasper
Owner & General Manager
2010 Blue St. Westlake, OH 44145
If your report is a final report, you want to conclude your recommendations with a professional conclusion. Remember, this is a report, not a letter. Reports are directed to a file, not addressed like a letter, nor signed like a letter. The pre-filled captions at the top of the report identify the file to which this report is directed. Your name and title go at the end of the report attesting to this being your work product.
Example of the File Conclusion Caption Verbiage: Recommendations:
This concludes the adjustment of this loss. We are closing our file. Thank you for the assignment.
(Your Provencher Email)
(Your Cell Phone)
Report Writing Tips
Now that you have the report structure guidelines ala Provencher & Company, we would like to close with a mini flashback to your grade school and middle school grammar and writing classes with a few bad habits we adults have picked up in our business writing. Please don’t let this happen to you!
Basic Rules of Grammar and Structure
•Maximum length of a paragraph is eight lines. If it is more than eight lines, break into two paragraphs, or re-read it and eliminate extraneous words.
•A paragraph should focus on one subject. A paragraph that is too long is unreadable.
•A paragraph consisting of only one sentence is usually improper and needs to be edited by expanding the thought, eliminating it or adding it somewhere else in the document.
•Use consistent spacing throughout report. Block alignment provides best overall appearance. Make sure the selected font size is not too big or small; 11 or 12 point font works best for business writing.
•Try not to use the word “and” more than once in the same sentence.
•If you find you have a lot of commas in one sentence, consider breaking it into more than one sentence.
•Sentences that meander endlessly are impossible to follow.
•Single digit numbers are to be spelled out, “two” instead of “2”, while double digit numbers are to be displayed in numeric form, “37” rather than “thirty seven”. Write “first” instead of 1st. If you are beginning a sentence with a number, always spell it as a word.
•Don’t type over old reports because you are too lazy to start a new one. This is how incorrect information gets transferred!
•Read your report aloud to see how it sounds.
•Use Spell Check and the on-line dictionary! Howe embarrassing 2 git to cart wit misspelled words on yur repert! Also keep in mind Spell Check cannot pick up on misspelled words if the misspelled word is a real word, i.e., two versus too – proofing your work is critical!
Did you miss the beginning of this series? Find them here: