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Finding a Contractor

The Oklahoma Construction Industries Board has been set up to assist Oklahomans in finding licensed contractors. The mission of the Construction Industries Board is to protect life and properly by licensing and inspection of the related trades for the health, safety, and welfare of the public.

Construction Industries Board

2401 NW 23rd St, Suite 2F
Oklahoma City, OK 73107
Local: (405) 521-6550
Toll Free: (877) 484-4424
Fax: (405) 521-6525
Website: www.ok.gov/cib

Office Hours & Additional Information

* Hours of Operation: 8:00 a.m. to 4:30 p.m., Monday through Friday except on Holidays.

  • Ask friends, neighbors and co-workers for contractor referrals.
  • Contact local trade organizations, such as the Builder’s Association or Remodeler’s Council for the names of members in your area.
  • Contact the vendors who sell supplies to contractors.
  • Check Google reviews and other online review sites to gather feedback from previous customers of the contractor.

Hiring a Contractor

When hiring a contractor, watch out for scam artists. You should be especially weary of phone or door-to-door solicitations that promise to speed up the insurance or building process and those who ask for large cash deposits or advance payments in full.

Consumers should also be aware that some rip-off artists may pretend to be employed by FEMA or other agencies. Some traits of scams or con artists can include:

  • Lack of proper identification: A FEMA or SBA shirt or jacket is not absolute proof of someone’s affiliation with an agency. Ask to see the laminated photo identification card; if they don’t have it, they are probably not official.
  • Going door-to-door: Persons going door-to-door to damaged homes or phoning victims claiming to be building contractors could be frauds. If callers solicit personal information such as Social Security or bank account numbers, they are not official. FEMA inspectors may come to your neighborhood, but all FEMA inspectors will have proper laminated photo identification. Remember, FEMA and SBA inspectors never charge applicants for disaster assistance or for inspections. If in doubt, do not give out information.
  • Charging fees to be put on a list or fees to have forms filled out: Some scammers have asked for upfront money to be put on a list or demanded fees to fill out the disaster loan application.
  • Offers to increase the amount of your disaster damage assessment: This is not wise and is a sure sign of a scam.
  • Asking for cash upfront: Under no circumstances are FEMA and other agency representatives allowed to accept money. FEMA inspectors assess damage but do not hire or endorse specific contractors.

If you suspect a repair rip-off, fill out a consumer complaint application with the Oklahoma Attorney General’s office. You can find the complaint forms at http://www.oag.state.ok.us/oagweb.nsf/ccomp.html. If you suspect fraud, waste or abuse involving FEMA disaster assistance programs, report it to FEMA’s Inspector General’s Office at (800) 323-8603.

In addition to taking precautions to prevent getting ripped-off, the following will assist you in hiring a contractor to get your business up and running:

  • Get a written estimate. Compare services and prices before making a final decision. Also, read the fine print. Some contractors charge a fee for a written estimate, which is often applied to the cost of subsequent repairs they make.
  • Check references. Contractors should be willing to provide names of previous customers. Call several former customers who had similar work done to make sure they were satisfied with the job.
  • Ask for proof of insurance. Make sure the contractor carries general liability and workers’ compensation insurance. If the contractor is not insured, you may be liable for accidents that occur on the property.
  • Use reliable, licensed contractors. Call the local building inspector, Better Business Bureau, Home Builders Association, Building Trade Council or the local Chamber of Commerce to see if any complaints have been filed against the contractor.
  • Insist on a written contract. A complete contract should clearly state all tasks to be performed, all associated costs and the payment schedule. Never sign a blank contract or one with blank spaces. Make sure the contract clearly states who will apply for the necessary permits or licenses. Have a lawyer review the contract if substantial costs are involved, and keep a copy for your records.
  • Get guarantees in writing. Any guarantees made by the contractor should be written into the contract. The guarantee should clearly state what is guaranteed, who is responsible for the guarantee and how long the guarantee is valid.
  • Obtain a local building permit, if required. Permits may be required for site work other than demolition and for reconstruction. Contact your local government for permit information.
  • Make final payments when the work is completed. Do not sign completion papers or make the final payment until the work is completed to your satisfaction. A reputable contractor will not threaten you or pressure you to sign if the job is not finished properly.
  • Pay by check. Avoid on-the-spot cash payments. The safest route is to write a check to the contracting company. A reasonable down payment is 30 percent of the total cost of the project, to be paid upon initial delivery of materials. Federal law gives consumers a three-day “cooling off” period for unsolicited door-to-door sales of more than $25.
  • If necessary, cancel a contract in the proper manner. This should be done within three business days of signing. Be sure to follow the procedures for cancellation that are set out in the contract. Send the notification by registered mail with a return receipt to be signed by the contractor.

Construction Contracts

  • Get a written contract.
  • Specify the start and finish dates to protect your interests, but realize that bad weather, unavailable materials or other problems may affect these dates.
  • Include pay schedules and itemized prices. If you want special materials such as hardwood trim or top grade lumber, be sure this is specified.
  • If possible, have a lawyer review all contracts and related documents before you sign.
  • Don’t make a large first payment, and don’t pay for the project in full until work has been completed and inspected.
  • Clearly state any warranties or guarantees on the work.
  • Be sure you and the contractor sign the agreement, with each of you keeping original copies.

Leases FAQ

The following questions are designed to provide general information for small businesses that rent their space from a landlord and for landlords who rent space to small businesses. Generally, the rights of both the tenant and the landlord will be determined by the provisions of your lease. There is no one single “standard” form of lease, even though many leases are based on preprinted lease forms. The provisions of a lease that covers these matters can vary significantly, even for different leases in the same building.

A legal professional will need to check the provisions of your lease carefully to answer these questions for your particular case. The following is only general advice for tenants and landlords regarding property that is damaged or unusable as a result of destruction relating to the disaster. The advice is based on general principles of state law in Oklahoma and some of the form leases commonly used in Oklahoma and should not be relied upon without first consulting an attorney.

What happens if the building or property that is leased is destroyed? Does the lease automatically terminate? Does the tenant have to pay rent?
To answer these questions, you will need to first check your lease to see if there is a specific written provision setting forth what happens if the leased premises are totally destroyed or partially destroyed. Most business leases include this type of provision, and these provisions may include definitions that will help you to determine whether your building has been totally destroyed or partially destroyed. If your lease contains such written provisions, those written provisions will govern and should provide the answer to your question.

If your lease does not contain specific provisions setting forth what happens when the leased premises are totally or partially destroyed, or if you do not have a written lease, then this question will be answered based on general provisions of state law.

Generally, unless a lease contains specific provisions to the contrary, a lease automatically terminates only when the leased premises are “totally destroyed.” The critical factor is whether the leased premises are “totally destroyed” or only “partially destroyed.” Determining whether the premises are totally or partially destroyed is a fact determination made on a case-by-case basis. In most situations, the lease will terminate only if the premises are “totally unfit for use.”

Whether the property is totally unfit for use will depend on several factors. The primary factor is the extent of damage. For example, a building that burns to the ground or is completely submerged by floodwaters would likely be considered totally destroyed. But if the damage is limited (for example, if only the roof is damaged or floodwater only damaged the floor or carpet of a leased building), then the tenant probably cannot terminate the lease on the basis of that damage.

Another factor is the landlord’s ability to repair the premises. If the landlord can repair the damage in a reasonable period of time, then the tenant may not be able to terminate the lease. The length of time that a landlord has to make repairs will depend on the circumstances and may hinge on the term of the lease. If a lease is for a term of 10 years and there are still eight years remaining on the lease, it might be reasonable for the landlord to take 30 or 60 days to make repairs. But if the lease is for a shorter term or if there are only several months left on the lease, then 30 or 60 days would not be reasonable and the tenant should be entitled to terminate the lease.

In some cases, it is necessary for the tenant to provide notice before terminating the lease. Once the lease is terminated, the tenant is relieved of any obligation to pay rent. But until the lease is terminated, the tenant must continue to pay rent according to the terms of the lease. In some cases, the tenant may be able to pay an adjusted rent until necessary repairs are made, but the need for repairs does not automatically release the tenant from its obligation to pay rent.

Is the landlord obligated to rebuild the building?
Again, it is important to refer to your lease, as commercial leases generally have provisions dealing with the landlord’s obligations to rebuild. Absent an express provision in the lease, the answer generally depends on the severity of the damage. If the leased premises are partially damaged or rendered partially unusable for the purpose for which it was leased, then the landlord is obligated to make all necessary repairs at its expense.

If the building is so seriously damaged that the landlord decides to demolish or rebuild it, or in the event the premises are totally damaged or rendered wholly unusable, the landlord may terminate the lease rather than rebuilding.

Does the tenant have the right to terminate the lease if the landlord plans to rebuild the building?
Although law provides the tenant with a right to terminate the lease if the premises are partially destroyed, commercial leases almost always have specific provisions which supersede the statute. Tenants should consult their own lease.

Can the landlord terminate the lease if the premises are partially destroyed?
A landlord can terminate a lease when (1) the lease itself gives the landlord a right to terminate when a disaster renders the premises partially unusable, or (2) the landlord and tenant mutually agree to terminate the lease.

If the landlord terminates the lease, is the tenant entitled to receive its security deposit?
Details regarding the refund of the security deposit will be controlled by the terms of the lease.

Is the landlord required to repair and restore the tenant’s furniture and equipment?
Generally, the landlord is not required to repair any damage to the tenant’s furniture and/or furnishings or any fixtures, equipment, improvements or appurtenances that are removable. This damage should be covered by the tenant’s insurance company.

Is the tenant obligated to pay rent during the time that the landlord makes repairs on the building?
Again, this depends on the severity of the damage. Determining whether premises are totally or partially destroyed is a fact determination made on a case-by-case basis. To be considered “totally destroyed,” the premises must cease to be fit for use. Extreme flood or storm damage is likely to be considered “total destruction,” while minor flood or storm damage is most likely only a partial destruction.

Rent reductions will be governed by the terms of the lease. In any case, before paying less than full rent, the tenant should always talk to the landlord to reach a mutual agreement on any rent reduction. If the landlord and the tenant cannot agree on the appropriate amount of the reduction, then the tenant must sue and have a court decide the amount.

In the event the premises are totally damaged or rendered wholly unusable, the lease terminates with no further liability on the part of the tenant or the landlord. The tenant does not have to continue rent payments from the time of the destruction.

Once the landlord completes the restoration of the premises, the tenant may still have work to do to repair installations, phones, office equipment, etc. The tenant will be obligated to pay rent during this time period, but may be able to cover the cost of that rent from proceeds of the tenant’s business interruption insurance policy.

Note: commercial leases have specific provisions governing rent abatement in the event of destruction of the premises, and these provisions dictate the rights of the landlord or tenant. Refer to your lease for the terms that apply to your situation.

How long can the landlord take to repair the premises?
If the landlord elects or is required to repair the premises, the landlord must do so reasonably expeditiously, subject to delays due to adjustment of insurance claims, labor troubles and causes beyond the landlord’s control.

Can the tenant withhold rent if the landlord has failed to repair the premises in a timely manner after the disaster?
Generally, a tenant remains obligated to pay rent if the premises are usable and are not totally destroyed or made unusable, as discussed above. Thus the requirement to pay rent is not generally dependent on whether the landlord makes timely repairs, unless the tenant decides to terminate the lease on this basis. The tenant may terminate the lease, if the landlord fails to timely repair the premises in a timely manner. In that case, once the lease is terminated, the tenant is no longer required to pay rent.

If the landlord elects to terminate the lease, is the landlord obligated to help the tenant find alternative space or reimburse the tenant for related costs?
No, unless the lease contains a specific provision that provides for this.

Can the landlord rent the premises to someone else while the tenant is gone?
No, a landlord cannot rent the premises to another party unless the lease has been terminated. The landlord has an obligation to make the leased space available to the tenant as long as the lease is in effect. The landlord cannot impair the tenant’s “peaceful possession” of the property unless there has been a default by the tenant and the lease has been terminated.

Can the building be condemned?
Yes. Governmental agencies that have jurisdiction over a building may order it to be condemned if the building is not suitable for safe occupancy. Generally, either FEMA or the local building inspection department is the agency that has jurisdiction to determine that a building cannot safely be occupied.

If the building is condemned, will the property owner be paid for the loss?
When the government condemns property based on a finding that it is no longer habitable or safe for occupancy, the government is not responsible for paying for the loss of the property. Generally, the government is only required to pay for the loss of the property when the property is taken by the government for a public use.

Condemnation of property as unsafe generally is not a “taking” for public use. To the extent the owner can recover the lost value of the condemned property, the property owner might be able to recover all or part of the value of the property from the owner’s insurance (depending on the terms of that insurance) or from FEMA or other relief agencies.

Internal Revenue Service

For this disaster, until June 30, the IRS is postponing certain deadlines for taxpayers who live or have a business in the disaster area. The deadlines in your situation may vary.

  • Under section 7508A, the IRS gives affected taxpayers until June 30 to file most tax returns (including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns and trust returns; estate, gift and generation-skipping transfer tax returns; and employment and certain excise tax returns), or to make tax payments, including estimated tax payments, that have either an original or extended due date occurring on or after April 15 and on or before June 30.
  • The IRS also gives affected taxpayers until June 30 to perform other time-sensitive actions described in Treas. Reg. § 301.7508A-1(c)(1) and Rev. Proc. 2007-56, 2007-34 I.R.B. 388 (August 20, 2007), that are due to be performed on or after April 15 and on or before June 30.
  • This relief also includes the filing of Form 5500 series returns in the manner described in Section 8 of Rev. Proc. 2007-56. The relief described in Section 17 of Rev. Proc. 2007-56, pertaining to like-kind exchanges of property, also applies to certain taxpayers who are not otherwise affected taxpayers and may include acts required to be performed before or after the period above.
  • The postponement of time to file and pay does not apply to information returns in the W-2, 1098, 1099 series, or to Forms 1042-S or 8027. Penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause. Likewise, the postponement does not apply to employment and excise tax deposits. The IRS, however, will abate penalties for failure to make timely employment and excise tax deposits due on or after April 15 and on or before May 2 provided the taxpayer made these deposits by May 2.
  • Affected taxpayers in a federally declared disaster area have the option of claiming disaster-related casualty losses on their federal income tax return for either this year or last year. Claiming the loss on an original or amended return for last year will get the taxpayer an earlier refund, but waiting to claim the loss on this year’s return could result in a greater tax saving, depending on other income factors. See your CPA or Tax Preparer.
  • Individuals may deduct personal property losses that are not covered by insurance or other reimbursements. For details, see Form 4684 and its instructions.
  • Affected taxpayers claiming the disaster loss on last year’s return should put the Disaster Designation “Oklahoma/ Severe Storms and Tornados” at the top of the form so that the IRS can expedite the processing of the refund.
  • Taxpayers may download forms and publications from the official IRS Web site, www.irs.gov, or order them by calling 1-800-TAX-FORM (1-800-829-3676). The IRS toll-free number for general tax questions is 1-800-829-1040.
  • If an affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the telephone number on the notice to have the IRS abate any interest and any late filing or late payment penalties that would otherwise apply. Penalties or interest will be abated only for taxpayers who have an original or extended filing, payment or deposit due date, including an extended filing or payment due date, that falls within the postponement period.

Recovering from Disaster

Take care of yourself first

You have just been through a disaster that has turned your life upside down. A disaster can do damage beyond the obvious physical destruction. The hidden enemy could be emotional stress and anxiety. Stay calm and collected and remember that cooler heads will prevail in times of adversity. The Red Cross and FEMA suggest the following steps you can make to relieve any tensions or stress:

  • Discuss and communicate your problems
  • Rest often and eat well
  • Set a manageable schedule
  • Watch for signs of stress
  • Seek help if you cannot shake feelings of anxiety or stress

 

Stay healthy

The damage to your business or property from a disaster can cause various potential dangers to your health. The building’s foundation could have become weakened, the electrical system may have shorted out and flooding or rain may have left behind things that can make you very sick. For these reasons, you should avoid the cleanup unless you know what you are doing or until you know it is safe to do so.

FEMA and the Red Cross suggest that infants, pregnant women and people with health problems should avoid the damaged or flooded property until cleanup is complete. In addition, confirm that the water is safe at your property before you drink it or wash anything with it.

The following are some recommended procedures from the Department of Labor to keep you safe and healthy if you attempt cleanup efforts yourself:

 

Health tips

  • Take frequent rest breaks when lifting heavy objects. Avoid overexertion, and practice good lifting techniques. To help prevent injury, use teams of two or more to move bulky objects; avoid lifting any materials that weigh more than 50 pounds per person, and use proper automated lifting assistance devices if practical.
  • When working in hot environments, have plenty of drinking water available, use sunscreen and take frequent rest breaks. Wear light-colored, loose-fitting clothing.
  • Be sure a first-aid kit is available to disinfect any cuts or abrasions. Protect open cuts and abrasions with waterproof gloves or dressings.
  • Wash your hands often during the day, especially before eating, drinking or applying cosmetics.

 

General precautions

  • Use a wooden stick or pole to check flooded areas for pits, holes and protruding objects before entering.
  • Ensure that all ladders and scaffolds are properly secured prior to use.
  • Conduct a preliminary worksite inspection to verify stability before entering a flooded or formerly flooded building or before operating vehicles over roadways or surfaces. Don’t work in or around any flood-damaged building until it has been examined and certified as safe for work by a registered professional engineer or architect.
  • Washouts, trenches, excavations and gullies must be supported or their stability verified prior to worker entry. All trenches should be supported (e.g., with a trench box). If no support is available, the trench must be sloped at no less than a 1:1 (45°) angle for cohesive soil and 1:1½ (34°) angle for granular soils including gravel, sand and loamy sand or submerged soil or soil from which water is freely seeping.
  • Establish a plan for contacting medical personnel in the event of an emergency.
  • Report any obvious hazards (downed power lines, frayed electric wires, gas leaks or snakes) to appropriate authorities.
  • Use fuel-powered generators outdoors. Do not bring them indoors. Use life-vests when engaged in activities that could result in deep water exposure.
  • Use extreme caution when handling containers holding unknown substances or known toxic substances (for example floating containers of household or industrial chemicals). Contact the Environmental Protection Agency for information on disposal at the National Response Center (1-800-424-8802).
  • Do NOT use improvised surfaces (e.g., refrigerator racks) for cooking food or for boiling water to avoid exposure to heavy metals.

 

Clothing and personal protective equipment

  • Always wear water tight boots with steel toes and insoles, gloves, long pants and safety glasses during cleanup operations; sneakers should NOT be worn because they will not prevent punctures, bites or crush injuries. Wear a hardhat if there is any danger of falling debris.
  • Wear a NIOSH-approved dust respirator if working with moldy building materials or vegetable matter (hay, stored grain or compost).
  • When handling bleach or other chemicals, follow the directions on the package; wear eye, hand and face protection as appropriate, and have plenty of clean water available for eye wash and other first-aid treatments.

 

Electrical hazards

  • Do NOT touch downed power lines or any object or water that is in contact with such lines.
  • Treat all power lines as energized until you are certain that the lines have been de-energized.
  • Beware of overhead and underground lines when clearing debris. Extreme caution is necessary when moving ladders and other equipment near overhead power lines to avoid inadvertent contact.
  • If damage to an electrical system is suspected (for example, if the wiring has been under water, you can smell burning insulation, wires are visibly frayed or you see sparks), turn off the electrical system in the building and follow lockout/tagout procedures before beginning work. Do not turn the power back on until electrical equipment has been inspected by a qualified electrician.
  • When using a generator, be sure that the main circuit breaker is OFF and locked out prior to starting the generator. This will prevent inadvertent energization of power lines from backfeed electrical energy from generators and help protect utility line workers from possible electrocution.
  • Be aware that de-energized power lines may become energized by a secondary power source such as a portable backup generator.
  • Any electrical equipment, including extension cords, used in wet environments must be marked, as appropriate, for use in wet locations and must be undamaged. Be sure that all connections are out of water.
  • All cord-connected, electrically operated tools and equipment must be grounded or double insulated.
  • Ground-fault circuit interrupters (GFCIs) must be used in all wet locations. Portable GFCIs can be purchased at hardware stores.

 

Fire protection

  • Immediately evacuate any building that has a gas leak until the leak is controlled and the area ventilated.
  • Be sure an adequate number of fire extinguishers are available and re-evaluate the fire evacuation plan.
  • Be sure all fire exits are clear of debris and sand bags.

 

CONTRACT DELIVERY
CONTRACTORS
EMPLOYEES & LAYOFFS
LEASES FAQ
TAX ISSUES

Business Interuption 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.

The following is a common example of a worksheet that can be used to calculate your business-interruption loss:

SAMPLE BUSINESS INTERRUPTION WORKSHEET
1. Gross Sales $______________________

2. Adjustments to gross sales (includes discounts given, returns $______________________ andallowances, bad debts, freight)
3. Net Sales (1 minus 2) $______________________

4. Other income that would be lost if operations were interrupted $ _____________________

(includes rent, interest, service fees)
5. Total revenues (3 minus 4) $______________________

6. Merchandise or materials consumed
a. Purchases during the year $______________________
b. Changes in inventory
Beginning inventory $______________________
Ending inventory $______________________
Change (beginning minus ending) $______________________
c. Total (a plus b) $______________________

7. Gross earnings (5 minus 6c) $______________________

8. Discontinuing expenses (includes
payroll that would not continue, rent, $ _____________________
heat, light, delivery, advertising,
maintenance cost, etc.)

9. Gross Earnings Discontinued
Expenses (7 minus 8) $ ____________________

Adjust Gross Earnings After Discontinued Expenses for period or Interruption Expected

Insurance Needed
1 year: Line 9* 1.00 = $______________
9 months: Line 9*0.75= $______________
6 months: Line 9*0.5 = $______________

Types of Coverage

Business Income Coverage: Designed to replace income that would otherwise have been earned by the business had no loss occurred. Business income is generally defined as the net profit or loss before taxes, plus continuing normal operating expenses, including payroll. This insurance definition contrasts with the accounting definition of net profit (or loss), which is the net profit after taxes. Coverage is generally limited to the loss of income sustained until the property is restored or for a specified period of time following the physical loss or damage. Other limitations apply to the period for which “ordinary payroll” coverage is included (often 60 days).

Extra Expense Coverage: Designed to pay for necessary expenses incurred during the period of restoration of the property because of the loss or damage to the property. Extra expenses include those necessary to continue operating the business at its original location or at a temporary replacement location until the original location is repaired. Extra expenses may also include expenses that minimize the time your business is unable to operate or those necessary to repair or replace damaged property or valuable papers and records.

Contingent Business Interruption Coverage: Designed as an extension of coverage to cover loss of income incurred due to a property loss at key supplier or customer location. For example, if a key supplier experiences a fire at its plant and is unable to deliver parts or goods necessary for the continuation of your business, you may have a claim for a contingent business interruption loss.

Civil Authority Coverage: Covers loss of business income and extra expense due to the government’s denial of access to property or due to a covered loss at a location owned by others. A waiting period may apply before coverage begins, and coverage generally applies only for a few weeks.

Ingress/Egress Coverage: Coverage may be provided for loss of business income and extra expense when you cannot gain access to your property without the government action required under the coverage for closure by a civil authority.

Miscellaneous Related Coverage: Other related coverage may include dust and debris removal coverage, event-cancellation coverage, valuable-papers coverage and service-interruption coverage.

Possible Coverage Adjustments

Extended Period of Indemnity: May extend period for loss of income coverage for a specified time beyond completion of repairs.

Definition of “Suspension”: May determine whether a complete or partial cessation of business is needed to trigger coverage.

Resumption of Operations: May limit business interruption loss to the point at which operations can be even partially resumed, even though the business may not be able to fully sustain itself.

Coinsurance Provisions: Requires that policyholders must pay a share of business income loss if the actual loss sustained is substantially higher than the estimated income established at the time insurance was purchased.

Agreed Value: Establishes in advance a maximum for recovery in any given month.

Covered Locations: Identifies what locations are covered. There may be extensions of coverage for “newly acquired locations” to cover property recently acquired and for property at locations not owned by the insured.

Building Ordinances: May provide coverage for the additional time to rebuild due to compliance with building ordinances.

Electronic Media and Records Limitation: May limit replacement period for electronic data and documents.

Typical Exclusions

Idle Periods: Coverage is generally excluded for periods when operations would have been idle.

Interference: Additional costs for rebuilding due to labor unrest may be excluded.

Loss of Contracts: Income loss on long-term contracts may be limited to period ending with completion of repair or replacement.

Consequential Losses: Coverage for consequential losses may be excluded; however, business interruption policies may contain an extension of coverage for such losses.

Utility Service Interruption: Precludes coverage for interruption of services from utilities.

Finished Stock: For manufacturing operators, recovery for lost profits on finished stock may be covered under physical damage to property rather than under interruption.

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.

Insurance FAQ

I own a business. What kinds of insurance coverage could I have for claims made against me or my company?
Workers’ compensation claims can be brought against you by injured employees or their families for disability and lost wages. Injured visitors or those employees who are exempt from workers’ compensation may have claims under health insurance, short and long-term disability and travel accident policies. You may be covered by commercial general liability policies for lawsuits brought against you for bodily injury or property damage. Commercial and personal umbrella and excess policies may provide additional coverage.

My insurance company has denied me coverage or has offered me less than I think I should receive. What can I do?
Insurance companies are required to acknowledge receipt of claims, communicate their decisions on claims and pay claims in a timely manner. In general, insurance companies should acknowledge receipt of your claim within 15 days of receiving notice of your claim and should communicate decisions on claims within 40 days of receiving your claim. Payouts should occur within 30 days of your acceptance of their offer.

If coverage is denied, in whole or in part, ask the insurance company to provide you with its reasons in writing, as well as whether it has an appeals process. You should ask for any reports prepared by the insurance company in assessing your property or evaluating your claim. You may also want to seek an advance of the undisputed portion of your claim, if you can do so without giving up your rights to the disputed portion. Contact your state department of insurance if you feel your claim has been wrongfully denied. You may want to seek help from an attorney, but be aware that their fee often will reduce your total recovery.

Most insurance policies have a one-year statute of limitations from the date of the occurrence of the damage for bringing a lawsuit against the insurance company for failure to pay a claim. If you do not file your lawsuit within this period, you may be prevented from doing so. You should read your policy and check the applicable law for the statute of limitations.

I am not happy with the way my insurance company has treated me. What should I do?
Contact the Oklahoma Insurance Department

Oklahoma Insurance Department (OKC)
800-522-0071 or 405-521-2828
Five Corporate Plaza
3625 NW 56th, Suite 100
Oklahoma City, OK 73112-4511

Oklahoma Insurance Department (Tulsa)
918-295-3700
7645 E 63rd St, Suite 102
Tulsa, OK 74133

Insurance Claims

For direct property damage, including collateral damage, and for indirect property damage, including business income losses; extra expenses; and computer, valuable records and data processing losses, you can look to the following types of policies:

  • All risk policies
  • Named peril policies (fire, etc.)
  • Building and personal property policies
  • Business owner property policies
  • Boiler and machinery policies
  • Computer policies
  • Commercial inland marine policies
  • Causes of commercial loss policies
  • Condominium commercial property or owner policies
  • Homeowner/renter policies
  • Ordinance or law commercial property policies
  • Jewelers block policies
  • Flood policies
  • Valuable papers and records policies

If your business was closed by damage or governmental action, in addition to being covered by the policies listed above, you may be covered by business income (an extra expense) and cancellation policies. If you suffered damage to vehicles such as automobiles and boats, you may be covered under business or personal automobile policies, truckers’ policies, motor carrier policies, mobile equipment policies, garage coverage and marine policies. If you or your employees were injured, you or they may be covered by your workers’ compensation policy. If not, which may be the case if you are a sole proprietor, director or officer, you can look to health insurance policies and short-and long-term disability policies (group and individual).

Submitting Your Claim

STEPS TO TAKE IMMEDIATELY

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 Oklahoma Insurance Department at 1-800-522-0071 (Toll-Free), 405-521-2828 (Local) or online at http://www.ok.gov/oid.

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. Section 11: Contacts and Resources of this guide includes the contact information for most of the nation’s insurance companies.

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
  • Date and time 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. Also ask the insurance company 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
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.

Photograph the outside of the premises, showing any damage or flooding. Photograph the inside of the premises as well, 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.

Prior to signing an agreement/contract with a cleaning, remediation or maintenance contractor, consult with your adjuster or insurer concerning coverage.

Step 4
List the areas that have 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.

Can I make temporary repairs?
Before making any repairs, get permission from your insurance company. Once you have that permission, even if the adjuster has not visited yet, make all necessary temporary repairs such as boarding up windows and repairing holes in the walls or roof. Move your personal property to a protected area. Do not dispose of items you believe are a total loss until the insurance adjuster has inspected them or unless you are instructed to do so by local officials. If you must dispose of damaged items, photograph them and take a swatch or sample. Take photographs before you begin repairs or cleanup, and keep all of your receipts for your expenses.

Can I hire someone else to make emergency repairs?
Usually you can hire someone else to make temporary or emergency repairs, depending on the coverage your policy provides. Such policies usually cover materials and reasonable labor expenses for temporary and emergency repairs in addition to final repairs. Get several estimates. Also, contact your insurance company to find out if you will be reimbursed for repairs you conduct yourself. Keep all of your receipts for your expenses.

Handling Your Claim

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.

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.

Step 1: Review Your Policy
The following types of coverage are typical in business interruption insurance policies. It is important for you to review these to ensure that you maximize your ability to continue operations with minimal disruption.

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.

The following is a common example of a worksheet that can be used to calculate your business-interruption loss:

SAMPLE BUSINESS INTERRUPTION WORKSHEET
1. Gross Sales $______________________

2. Adjustments to gross sales (includes discounts given, returns $______________________ andallowances, bad debts, freight)
3. Net Sales (1 minus 2) $______________________

4. Other income that would be lost if operations were interrupted $ _____________________

(includes rent, interest, service fees)
5. Total revenues (3 minus 4) $______________________

6. Merchandise or materials consumed
a. Purchases during the year $______________________
b. Changes in inventory
Beginning inventory $______________________
Ending inventory $______________________
Change (beginning minus ending) $______________________
c. Total (a plus b) $______________________

7. Gross earnings (5 minus 6c) $______________________

8. Discontinuing expenses (includes
payroll that would not continue, rent, $ _____________________
heat, light, delivery, advertising,
maintenance cost, etc.)

9. Gross Earnings Discontinued
Expenses (7 minus 8) $ ____________________

Adjust Gross Earnings After Discontinued Expenses for period or Interruption Expected

Insurance Needed
1 year: Line 9* 1.00 = $______________
9 months: Line 9*0.75= $______________
6 months: Line 9*0.5 = $______________

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 with 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 adjuster 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.

Insurance FAQ

I own a business. What kinds of insurance coverage could I have for claims made against me or my company?
Workers’ compensation claims can be brought against you by injured employees or their families for disability and lost wages. Injured visitors or those employees who are exempt from workers’ compensation may have claims under health insurance, short and long-term disability and travel accident policies. You may be covered by commercial general liability policies for lawsuits brought against you for bodily injury or property damage. Commercial and personal umbrella and excess policies may provide additional coverage.

My insurance company has denied me coverage or has offered me less than I think I should receive. What can I do?
Insurance companies are required to acknowledge receipt of claims, communicate their decisions on claims and pay claims in a timely manner. In general, insurance companies should acknowledge receipt of your claim within 15 days of receiving notice of your claim and should communicate decisions on claims within 40 days of receiving your claim. Payouts should occur within 30 days of your acceptance of their offer.

If coverage is denied, in whole or in part, ask the insurance company to provide you with its reasons in writing, as well as whether it has an appeals process. You should ask for any reports prepared by the insurance company in assessing your property or evaluating your claim. You may also want to seek an advance of the undisputed portion of your claim, if you can do so without giving up your rights to the disputed portion. Contact your state department of insurance if you feel your claim has been wrongfully denied. You may want to seek help from an attorney, but be aware that their fee often will reduce your total recovery.

Most insurance policies have a one-year statute of limitations from the date of the occurrence of the damage for bringing a lawsuit against the insurance company for failure to pay a claim. If you do not file your lawsuit within this period, you may be prevented from doing so. You should read your policy and check the applicable law for the statute of limitations.

I am not happy with the way my insurance company has treated me. What should I do?
Contact the Oklahoma Insurance Department

Oklahoma Insurance Department (OKC)
800-522-0071 or 405-521-2828
Five Corporate Plaza
3625 NW 56th, Suite 100
Oklahoma City, OK 73112-4511

Oklahoma Insurance Department (Tulsa)
918-295-3700
7645 E 63rd St, Suite 102
Tulsa, OK 74133

20 Questions to ask your agent

  1. If I don’t already have one, am I eligible for a BOP policy?
  2. What deductible do I have and how does it apply?
  3. Do I have a copayment and/or coinsurance?
  4. If I have coinsurance how does it work? (Example)
  5. Is my property coverage on an actual cash value basis or a replacement cost basis?
  6. Is my personal property and building coverage on the same basis (replacement cost vs. actual cash value)?
  7. Do I have/need a peak season endorsement on my inventory?
  8. If my policy is a “named perils” policy, what perils are covered? Are there any possible causes of loss that could impact my business that are not covered? Would an open perils policy cover those types of losses?
  9. What types of losses are excluded under this policy? Which ones might be particularly relevant to my business?
  10. What are my policy limits and how do the limits apply? Do I have/need an inflation guard?
  11. If I increase my deductible, how much does my premium go down?
  12. If I increase my limits, how much does my premium go up?
  13. Would a blanket policy (for multiple locations) be helpful to me?
  14. Are there any premium discounts that I could be eligible for? Is there anything I can do to get [additional] premium discounts?
  15. [If you are working with an independent agent] How many carriers do you work with that underwrite my type of policy? Why did you choose to place my business with the company you selected?
  16. Have you “shopped” my insurance recently?
  17. Is my insurance through the surplus lines? What does that mean for me?
  18. What is my company rated by AM Best and/or Standard and Poor? How does that compare to other insurers?
  19. Do you conduct free, regular risk assessments? How often? (If not, you might consider working with an agent who does) Is there any exposure that you are aware of for which I do not have insurance?
  20. Should I consider getting a claims-made basis liability policy instead of occurrence?

Insurance

Why do I need insurance and what types do I need?

You’ve worked hard to build your business. You work every day to be successful. You want to be sure that your business is protected. Accidents and disasters can and do happen, and if you aren’t properly insured, it could leave you in financial ruin. You need insurance to protect your lifestyle, your business, your assets and your income.

It is critical that you are adequately covered with the right types of insurance. You need to think about business income interruption and income replacement insurance. You may need a key man policy. Flood insurance may be very critical for covering your contents if you don’t own your building. You need to have a basic understanding of insurance.

Below are listed various types of insurance and what they cover. Also included are FAQ’s about insurance.
Finally we highly recommend that you work with a trusted agent to insure you have the right insurance at the right price.

20 QUESTIONS TO
ASK YOUR AGENT

TYPES OF COVERAGE
INSURANCE CLAIMS