How to negotiate with insurers to avoid roadblocks.
Last April Mark Moerdler, the executive vice-president of MDY Advanced Technologies, learned that $90,000 worth of computers and equipment had been stolen from his $4-million software and systems-integration company. Then the Fair Lawn, N.J., entrepreneur's troubles really began. "We conducted a computer audit to figure out the extent of the theft, and we filed a claim with our insurers. They stalled for nearly a year, and they never repaid us anything resembling the extent of our loss." Sadder but wiser, Moerdler offers this advice:
· When you negotiate your coverage, get a full description in writing of whatever documentation your insurers will expect you to file should you have any claims. "Otherwise, they'll seize on any excuse to require more documentation, different inventory records, anything that will postpone reimbursement."
· Don't act alone. "Bring in a lawyer at the first sign of delay. I wasted months by not involving our lawyer until the insurer offered us a 50¢-on-the-dollar settlement."
· Take serious measures if your insurer is uncooperative. "What finally scared the insurer into acting was our threat to report the incident to the state insurance commissioner. That would have gone into the insurance company's permanent records and maybe caused a lot of problems. That's the kind of action that produces results."
· Comparison shop for an insurer. And don't sign up based on price alone. "When it's time for us to renew, I plan to question many insurers about their claims-filing procedures."