Jan. 17, 2006--It took nine weeks, but Gulf Coast Laundry finally has a new roof over its head. It also has a new fleet of delivery trucks and enough working machines to keep its 40 employees busy washing towels and linens from a group of nearby hospitals.

Almost five months after Hurricane Katrina all but flattened his Gulfport, Miss., commercial laundry service, owner David Gross said his once-thriving business is finally getting back on its feet.

The question he now faces, like many small businesses in the storm-ravaged region -- even those with insurance -- is whether he can actually afford to.

Despite having taken out comprehensive insurance coverage, Gross said he has so far paid the bulk of these and other rebuilding costs straight out of his own pocket from personal savings.

Gross said local small businesses like his that had the foresight to purchase business insurance plans ahead of the 2005 storm season aren't faring much better than uninsured homeowners and business owners still waiting for federal emergency loan approvals.

"It's frustrating dealing with insurance companies and out-of-town lenders who have no idea what we're up against down here," Gross said. "It's war-like condition down here, but there's just no sense of urgency."

By urgency, Gross said he means getting capital in the hands of business owners before their costumers -- and workers -- start abandoning the region in droves.

For instance, without the local hotels and resorts that once helped push annual revenue to $6 million in 2003, the year the company was named on the Inc. 500 list of the nation's growing companies, Gulf Coast Laundry is currently in the red with just 80 of 140 employees back on the job -- many left homeless and living in one of nine trailers Gross rented out in the days after the storm. His biggest single client, Beau Rivage, an 1,800-room hotel, isn't scheduled to reopen until Aug. 29, 2006 -- a full year after Katrina struck. To date, Gross said he hasn't seen a penny from his business-interruption insurance policy.

"Our insurance policies are all very clear on the requirement to respond in a timely manner to a proof of loss," Gross said. "This is not happening."

For their part, insurers are blaming settlement delays on the sheer scale of devastation along the Gulf Coast and the resulting volume of claims -- echoing recent congressional testimony by Small Business Administration officials defending the agency against complaints of costly delays in disaster loan approvals. "Keep in mind that many of the same disruptions confronting victims of Hurricane Katrina face insurance adjusters and agents -- lack of power, phone service, housing, and fuel," the Insurance Information Institute, a New York-based trade group, said in a statement.

Insurers are expected to pay out some $34.4 billion this year for Katrina claims alone -- out of total insured and uninsured losses of more than $140 billion caused by the storm -- with the total number of claims on pace to far exceed the record-high 2 million filed after Florida's 2004 storm season, figures from the group's Hurricane Insurance Information Center showed.

Together, the year's three most devastating storms -- Katrina, Rita, and Wilma -- account for $45.2 billion in insured losses, according to the HIIC. Many insurers themselves lost decades' worth of profits to the storms and are even pulling back from high-risk areas, Hanover Insurance Group CEO Frederick Eppinger told a group of insurance industry executives at a Jan. 10 conference in New Jersey.

Meanwhile, claims adjusters are currently assessing damages in those areas of the region "accessible to them," and are making their way into the most seriously damaged communities "as soon as civil authorities will allow," according to the HIIC.

Complicating matters is a heated debate over wind damage versus water damage caused by the storm. Typically, small-business insurance policies cover wind, along with wind-driven rain and fire, but not floods, according to the HIIC. The property/casualty insurance industry is currently sparring with Mississippi residents and business owners in a lawsuit to broaden basic coverage.

Much of the destruction wrought by Katrina -- particularly in New Orleans -- is the result of flooding.

Still, Gross and others maintain that the industry is dragging its feet.

For instance, each of Gulf Coast Laundry's dozen delivery trucks, though covered by the same insurer, was assigned separate claim numbers and adjusters. As a result, the claims have taken months to close, while Gross has continued paying for leases, loans, and repairs, he said.

Gross also said he didn't receive his first check for primary coverage for damages to the company building and equipment until late December -- four months after the storm.

"At best they are incompetent," Gross said. "The most frustrating aspect of this entire process is that the insurance companies are not communicating with us."