It's tough enough to recover when you have a disaster, what's even tougher is satisfying the insurance adjuster as to your claim. Most insurance companies are quite willing to pay up, and quickly, but they demand proof of your loss, and that's where the problem begins.

WHAT TO DO RIGHT NOW!
To prove you own something requires an original dated invoice. If the item has been modified (as in the case of practically all computers) you need original dated proof of modification. Copies of invoices are not usually acceptable, only originals. Tough as it may seem, your insurance agency wants to know they are paying for the loss of a legitimately purchased items that belong to you, and that you're not 'padding' the claim.

OFF PREMISES STORAGE
The easiest way to make sure you have quality claim information is to build an Off-Premises Asset File. Each and every time you purchase an item, make a copy of the receipt and use that copy as your business copy, attaching your purchase order, copy of check or whatever you use to record the purchase for IRS purposes.

Take the original and file it somewhere else. File receipts of expensive items in a fire resistant cabinet in your basement, or if your business is home-based, consider using one of the storage facilities available on today's market. For somewhere around $20-$60 a month you can have a private, secure, locked space where you can place your fire resistant storage cabinets.

WHAT TO SAVE
Is it necessary to go back through your previous files and find old receipts? Yes! If you expect to make a claim for replacement value of something you purchased five, ten or twenty years ago, you will need proof of purchase of those items as well. For example, if you furnished your office with bits and pieces of furniture and other items that you originally purchased for your home, and if those items are lost in a fire, you will have to prove you purchased them . . . no exceptions!

If you have no receipts for some, hire an appraiser to examine your more expensive pieces and estimate the current replacement value of each. Follow your insurance agent's advice on this as ownership documentat ion is critical.

WHAT ABOUT ACCOUNTS RECEIVABLE?
Your accounts receivable files are every bit as valuable as cash! If you were to lose your A/R file in a fire or theft (in the case of computer files), most of your customers will help you reconstruct your files; but there always be that feeling in your gut that someone took advantage of the situation to understate what they owe.

I suggest you copy your A/R and G/L files weekly, and take the copies to your storage facility. The ultimate is to back-up daily, but most small businesses can reconstruct one week's data it's the long range stuff that will do you in. It's not necessary to back up your A/P files, your creditors will be more than happy to tell you what you owe!

VIDEO TAPING
This is simple. Borrow or rent a video camera and go through your office taping everything: pictures on the wall, rugs, copiers, desks, computers, printers, supply cabinets and their contents and everything that you would have to replace if you had a major loss. Point out each major item, making a comment on it's replacement value (if you know it), or it's purchase value (if you can find it). Store this tape (or tapes) along with your other off-premises data. Although this will not provide proof of purchase, it will provide proof the item actually existed in your office as of the date of the video tape.

POLICY REVIEW
Somewhere in this analysis you need to review your insurance coverage to see if it is adequate to meet your needs. For example, will your policy pay replacement value or depreciated value of an asset? How are you going to stay in business when your insurance company offers 38 cents for the depreciated cost of a computer you purchased four years ago?

A second item to consider would be business interruption insurance. No matter how great your records are, you will lose business during your recovery period. There is insurance out there to cover this, but you will have to have accurate records of how business was going just before the disaster. That's where your G/L records storage comes in handy!

HOME BASED BUSINESSES
Everything above is relevant to a home based business, the only difference is in how you are covered. Talk to the insurance agent covering your home to see if they will even cover a home based businesss. Some won't!