Insurance Complications

One of the challenges some food retailers have faced in attempting to reopen their stores in New Orleans has been in obtaining compensation through their insurance coverage.

Barry Breaux, chairman and chief executive officer of Breaux Mart, Metairie, La., told SN he suffered hurricane damage at four of his five stores — three from the wind and one from looters, who left that store, in Orleans, a total loss.

“We took the insurance money from that store and acquired an independent in St. Bernard Parish, and we're doing fantastic business there,” he said.

“There were some challenges getting the insurance money, but we were satisfied with what we got. We decided not to sue the insurance company — we took the quicker way, which was to settle for a realistic figure and move on. That was not as difficult for us as it was for people whose stores were underwater.”

He cited the example of one New Orleans operator whose stores did not experience flooding but were damaged by wind, which led to water damage and severe product loss. “He ended up hiring a lawyer to get everything he felt he was entitled to,” Breaux told SN.

“Because we had less damage than he had, we had access to our office and our files and were able to provide accurate financial numbers for a quicker resolution. And because we reopened fairly quickly, there was not an issue of business interruption, and we didn't have to deal with whether to pay rent or not on a property that was under water.”

But filing a claim for flood damage is different than claiming roof damage that results in product damage — the problem the other retailer encountered — Breaux pointed out. “Regular insurance doesn't pay for product losses due to flooding — that requires flood insurance. So the process is complicated.”

The 21,000-square-foot store Breaux opened in St. Bernard Parish is competing only with a Winn-Dixie in an area that once had five chain stores and a Wal-Mart and a population base of 65,000, compared with only about 30,000 now, he pointed out.

Breaux also acquired one of the Sav-A-Centers that Rouses didn't take — an 18,000-square-foot store in the Uptown area of New Orleans “that was never flooded and whose area didn't suffer a lot of damage.”