Our Sponsors Minimize
You are currently viewing the
OCTOBER 2013 issue of
Rental Management

Surviving a disaster

The right processes and backup records off-site can help


The fire started in the repair and maintenance shop, an hour after closing. The point of origin was a cardboard box used for years to contain loose parts. It was the proverbial perfect storm, recalls Tim Wagner, vice president of Wagner Rental & Supply, of the
May 31, 2011, fire that took down two-thirds of the company’s building.

The combination of a greasy container, a windowless metal room and extremely hot weather created just the right recipe for spontaneous combustion, which is exactly what happened. Even though the fire was quickly detected and responded to, by the time it was all over, only the front part of the Jackson, Ohio, store was intact.

“The building is divided into three sections,” says Wagner. “There’s the showroom and office. This was fine except for some minor smoke damage. A middle section is the storage area for small rental equipment. This area had extreme heat and smoke damage. The rear area, the repair and maintenance shop, was completely gutted.”

Wagner ticks off the cost of the damage:

  • Loss of repair parts, shop equipment and tools, $50,000.
  • Building loss, $200,000.
  • Rental equipment loss, $380,000 (not including lost rental business).

Still, says Wagner, it could have been much worse. The sparing of the showroom and office was fortunate, and enabled them to continue renting equipment. The company also has three other locations, two in Ohio and one in Kentucky. These other branches pitched in with elbow grease, tools and rental equipment.

“It was a huge advantage for us to have all of these resources,” he says, referring to the other locations. “It took over two months to purchase and replace the rental tools. If we would not have had these resources, we would have been crippled that entire time.”

Although it’s true that having multiple locations made recovering from this disaster decidedly easier, conferring an advantage
many rental businesses don’t have, Wagner Rental & Supply had processes in place that any size company can utilize in the face of a catastrophic event.

For example, all of their inventory and maintenance records are computerized and backed up off-site to the cloud. Their computer system has a point-of-sale (POS) component, so their inventory records stay current.

“Within days we were able to print out an accurate inventory list and almost immediately get a ballpark estimate of lost equipment,” says Wagner. They knew what was rented out and what was in. They also underwent annual insurance reviews, which ensured they had the right amount of coverage and also helped them develop a good rapport with their agent.

The only thing missing was an inventory list of their shop tools and parts, says Wagner, mentioning that they had to “sift through the rubble” to create a handwritten list. Now, they track these items on their computer as well.

“Keeping good track of inventory and updating your policy when you add new equipment or tools is absolutely important, as is knowing the limits of your policy,” says Tom Rensch, risk consultant with the Market Financial Group. Headquartered in Crystal Lake, Ill., the company has offices throughout the Midwest and is an independent agent representing ARA Insurance, Kansas City, Mo.

“The problem is that rental business operators get busy. They don’t think of telling us when they add new items, enabling us to adjust the coverage,” Rensch says. “I also think a lot of rental businesses don’t put as much emphasis as they should on creating and maintaining good, up-to-date lists.”

Many rental stores don’t realize how much they really have, he continues. This is why Rensch, based in St. Louis, recommends videotaping the store, creating a visual document of everything in the business. Then, store this in a waterproof/fireproof safe or off-site.

What else should be backed up? Building plans, insurance policies, equipment documentation, rental and accounting records, and contact lists for employees, major customers, suppliers, utilities, vendors and contractors.

Wagner suggests devising an action plan in anticipation of such an event. “Ask yourself what you’d do if you came in and your building was in ashes,” he suggests. “What are the first steps you’d take? Bring employees in on this, so they don’t feel so lost if something does happen.”

The company signed off on its claim exactly a year, minus a day, from when the fire happened, says Wagner. “Even though we had all these things in place, it still took an emotional toll on us. This is when you find out how important good records, good employees and good insurance are.”

Maura Paternoster is risk manager for ARA Insurance in Kansas City, Mo. For more information, call 800-821-6580 or visit  ARAinsure.com.




If you have any news that you would like to share, click here to contact our editors.

Copyright © 2014 by The American Rental Association all rights reserved.