On June 20, 2013 Southern Alberta endured a catastrophic flood resulting in a significant amount of property damage, numerous civil authority evacuations and power outages for individuals and businesses.
In any major catastrophe, access to supporting documentation may not be possible, as entry to premises has been restricted or the accounting records have been destroyed. The parties involved are unfamiliar with where documentation may be obtained to support any potential losses.
In these situations third-party sources may be the only source of information available. Keep this list in a safe place.
- External accountants – acquire financial statements and general ledgers. In some cases, tax returns may be available.
- Canada Revenue Agency (CRA www.cra-arc.gc.ca) – acquire all their corporate income tax returns, personal income tax returns and GST/HST returns.
- Banks – acquire all bank statements to identify payments for purchases, employee payroll and deposits for sales. In addition, banks may have budgets/forecasts and recent property values.
- Payroll processing companies – acquire detailed payroll records.
- Key suppliers – acquire purchase history to support inventory values.
- Municipalities – provide latest property tax notices to support property values.
Obtaining documentation from the above sources may take some time. For situations where potential lost profits need to be estimated quickly, industry information is readily available from:
- Industry Canada (SME Benchmark – www.ic.gc.ca/eic/site/pp-pp.nsf/eng/home) – based on the North American Industry Classification System (NAICS) Codes, a financial statement for an industry can be created.
- Statistics Canada (www.statcan.gc.ca) – provides information on external factors that need to be considered, such as the trend of the business industry.
- Industry/trade association publications – aid in understanding the business and environment. Examples are price specifications for commodities or market share.
- Provincial websites (such as www.bcstats.gov.bc.ca) – can provide location specific statistics on certain industries.
- Providing options to the parties involved will help ease them through what is indubitably a stressful time.
By Tony Volpe. Published in the Insurancewest November 2013 edition.