Most hospital fires stay in one room. The claim does not.
Last updated: October 2026
Smoke moves past the burn area, sprinkler water runs to the floors below, and in Texas a damaged unit reopens only after HHSC review and a final inspection. Census, procedures and payer mix carry the income loss. We document and negotiate the full loss for the policyholder, and we tell you plainly when a question belongs with your attorney or compliance counsel.
Start a claim review
Tell us what happened. A licensed Texas public adjuster will review the loss with you, and tell you straight whether you have a fight worth having. The review is free.
For fire claims, we call you back within 1 hour and visit your property within 24 hours or less.
HHSC's Architectural Review Unit says plan review for disaster repairs takes about 120 business days, depending on project size. Patients return only after the FM ARU-03 final inspection. That state timeline belongs inside your period of restoration, and the carrier's schedule often leaves it out.
Source: Texas HHSC, Architectural Review Unit.
Hospital fire or flood: what to do in the first 72 hours
Your first job is patients and staff. The second is keeping the record that the claim, the state and the carrier will all ask for. Most of that record is easiest to keep in the first three days and hardest to rebuild later.
Watch the sprinkler clock. Under the CMS fire safety rule, if a sprinkler system is out of service more than 10 hours in a 24-hour period, the facility must evacuate or post an approved fire watch (staff patrols while fire protection is down) until it is restored. Log every round.
Keep the origin intact. Fire officials will ask what failed. Keep the failed appliance, dryer, wiring, generator or panel parts, and the records of any contractor working on site, including hot work permits. Your duties to preserve evidence are a question for your attorney.
Photograph before cleanup. Every affected room, ceiling plenum, air handler and corridor, on the fire floor and the floors above and below. Map the sprinkler discharge zones and where the water traveled.
Log before you discard. Sterile supplies, pharmacy stock and food exposed to smoke or water are usually discarded under infection-control practice. Photograph, list and sample them first.
Give written notice to your broker and every policy that may respond: property, business income, equipment breakdown, flood, and any separate storm policy. In Texas, the insurer has 15 days after written notice to acknowledge the claim and request what it needs.
Open a loss cost center on day one. Patient transfers, rental generators, fuel, agency staff, overtime and lodging are extra expense, and they are only recoverable if they are documented.
Talk to HHSC before construction. Texas requires an Architectural Review Unit application package and written approval before disaster repair work starts.
Sources: CMS final rule, 81 FR 26872 (2016); HHSC Architectural Review Unit; Tex. Ins. Code §542.055.
Who you have to notify, and how fast
A hospital loss runs on two sets of clocks at once: regulators and insurers. Some reporting deadlines are set by facility type. Confirm the ones that apply to your license with your compliance counsel; we track the insurance side.
| Facility type | Fire or incident reporting | Repair and reopening |
|---|---|---|
| General and special hospitals | Licensing rules are at 25 TAC Chapter 133. Confirm the fire-reporting deadline with your compliance counsel. | ARU application and written approval before construction. Final inspection on Form FM ARU-03 before patients occupy. |
| Freestanding emergency medical care facilities | Incidents to HHSC within 10 business days; fires reported under 25 TAC Chapter 131, Subchapter F (26 TAC 509.62). | Same ARU process. |
| Special care facilities | Fires within 10 calendar days, or within 24 hours if a resident is hurt or killed (HHSC Form 6109). | Same ARU process. |
| Private psychiatric hospitals | Confirm with your compliance counsel. | HHSC approval before fire protection, electrical, plumbing or medical gas systems are replaced; phased work keeps exits and fire protection in place (26 TAC 510.121). |
The ARU process also covers ambulatory surgical centers, end-stage renal disease facilities and crisis stabilization units.
The insurance clocks in Texas
| Step | Deadline |
|---|---|
| Insurer acknowledges the claim and requests documents | 15 days after written notice (30 business days for surplus lines) |
| Insurer accepts or rejects in writing | 15 business days after receiving all requested items (30 days if arson is suspected) |
| Insurer pays an accepted claim | 5 business days (20 business days for surplus lines) |
| TDI-designated weather catastrophe | Each deadline above gets 15 more days |
Business days exclude weekends and Texas holidays. Count your deadlines with the Texas prompt payment deadline calculator.
Sources: HHSC Architectural Review Unit; 26 TAC 509.62; HHSC Form 6109; 26 TAC 510.121; Tex. Ins. Code §§542.051 to 542.059.
Why Texas regulators set your repair timeline
Business income pays for the period of restoration: how long repairs should take with due diligence. For a Texas hospital, that period runs through state approval, infection-control planning, long-lead equipment and inspections, not just the contractor's schedule. A carrier schedule that skips those steps is the most common reason a hospital income claim comes up short.
HHSC approval. Disaster repairs need an application package, submitted through TULIP (HHSC's online system), and written approval before construction.
Plan review. About 120 business days, depending on project size. Registered architects and engineers can use a self-certification option instead.
Infection control planning. Joint Commission standards require a preconstruction infection control risk assessment (ICRA), the plan for doing construction near patients. Major work in ICUs, oncology and surgical suites calls for Class IV precautions.
Containment. Class III and IV work requires critical barriers and negative pressure of at least 0.03 inch water gauge through HEPA-filtered units. Barriers stay until the work is inspected and cleaned, and patients may have to move if construction traffic cannot avoid them.
Equipment procurement. Runs alongside review and often sets the critical path.
Construction in an occupied building. Texas phasing rules for private psychiatric hospitals keep exits and fire protection working, with dust and vapor barriers around active work. Plan for the same discipline in any occupied tower.
Inspections. HHSC performs a final inspection, may perform an intermediate one, and requires a plan of correction for each. Form FM ARU-03 is required before patients occupy the space.
Volume ramp-up. Physicians and referral sources return slowly after reopening. The standard business income form pays only 60 days after reopening unless the policy bought a longer extended period of indemnity.
40 to 50 weeks
average generator lead time in 2026, and 52 to 70 weeks for large units. Switchgear ran 30 to 65 weeks.
iRecruit compilation, June 2026
1 to 2 years
for air handlers on hospital projects in 2022, versus about 4 weeks in 2019. Emergency generators ran a year to 16 months.
HFM, September 2022
5.2%
rise in producer prices for new health care building construction in the 12 months to September 2026. Switchgear and industrial controls rose 12.4%.
BLS Producer Price Index
No published lead times were found for imaging, OR equipment or nurse call systems. Get written quotes with lead times from vendors and keep them for the claim.
Code-driven delay is its own issue. Under the standard ISO business income form, time added by enforcing building codes falls outside the period of restoration unless an endorsement such as CP 15 31 was added. Check your policy before the carrier sets the schedule.
Sources: HHSC Architectural Review Unit; UNC SPICE construction and renovation module; 26 TAC 510.121; iRecruit (2026); HFM (2022); BLS PPI Table 2 (Oct. 2026); ISO CP 00 30 and CP 04 05.
Smoke, soot and sprinkler water: the damage beyond the burn area
Hospital fires are usually small. In U.S. medical facility fires from 2014 to 2016, 81.4% stayed limited to the object where they started, and about 5% spread beyond the room of origin. Deaths are rare: USFA counted about 5 deaths and 150 injuries a year across all health care facility types. The dollars come from what travels further.
61% / 4%
Cooking caused 61% of health care facility fires but only 4% of the direct property damage.
HFM, 2006 to 2010 data
$13,000 to $5,000
Average loss per fire fell from about $13,000 without automatic extinguishing equipment to about $5,000 with wet-pipe sprinklers.
HFM, 2006 to 2010 data
88% / 98%
In fires big enough to trigger them, sprinklers operated 88% of the time and controlled 98% of those fires.
HFM
$13,360
The NFIRS average loss per medical facility fire, pulled down by thousands of small kitchen fires. It is not a typical hospital claim.
USFA, 2014 to 2016
Hospitals defend in place, moving patients behind smoke and fire barriers instead of out of the building. That protects patients, and it means smoke and soot settle in rooms, plenums and air handlers well past the burn area. At UTMB's John Sealy Hospital in Galveston in January 2017, a second-floor fire in a construction zone pushed smoke up to the ninth floor. About 200 people were evacuated, and 43 patients went to local emergency rooms and hospitals.
Water often does more damage than fire. Most reported hospital fires now occur in sprinklered buildings, and water on and below the fire floor can exceed the fire damage. Smoke and water also reach sterile supplies, pharmacy stock and food service, which are usually discarded under infection-control practice.
What we do about it
We bring in industrial hygienists and coordinate with infection-control specialists to test and document the residue, moisture and air quality to healthcare standards, so the record shows what can be cleaned and what cannot. Expect the cleaning-versus-replacement fight to center on imaging, OR and nurse call electronics, and on sterile supplies. We document what actually happened, room by room, before cleanup erases it.
Sources: USFA NFIRS snapshot, medical facility fires 2014 to 2016; HFM (January 2014; October 2021); CSE, "Protecting a vulnerable population"; Galveston County Daily News (January 2017).
Life Safety Code, NFPA 99 and ordinance or law coverage
CMS adopted the 2012 Life Safety Code (NFPA 101, the fire-safety code CMS enforces in hospitals) and NFPA 99 (the code for hospital systems such as medical gas, emergency power and electrical) in a rule published May 4, 2016 and effective July 5, 2016. It covers hospitals, critical access hospitals, ambulatory surgical centers, inpatient hospices and long-term care, among others.
Replaced systems may meet new-system rules.
NFPA 99 systems that are replaced may have to meet the rules for new systems, and the AHJ (the authority having jurisdiction, the official who approves the work) can order upgrades where a condition is a distinct hazard to life.
High-rise sprinklers.
Under the CMS rule, buildings over 75 feet must be sprinklered throughout within 12 years, which runs to about May 2028. A repair near that deadline raises an ordinance or law question for your counsel.
Texas system approvals.
Texas rules for private psychiatric hospitals require HHSC approval before fire protection, electrical or medical gas systems are replaced.
What CMS left out.
CMS did not adopt NFPA 99 chapters 7, 8, 12 and 13, which cover IT and communications, plumbing, emergency management and security.
How the policy pays for code work
The ISO ordinance or law endorsement (CP 04 05) has three parts: loss to the undamaged portion torn down under a building law (A), demolition (B), and the added cost to rebuild to code (C). Part C pays only if the building is actually repaired or rebuilt. Without the endorsement, the base form's own code-upgrade coverage is the lesser of 5% of the building limit or $10,000. In 2026, the Texas Supreme Court held in In re Ace American that code-compliance costs the insurers did not dispute as to coverage were amount-of-loss questions for appraisers.
Whether a given code requirement counts as "enforced" under your policy wording is a legal question when it is disputed. We document the code-driven scope and tie it to the coverage; interpretation in a dispute belongs with your attorney.
Estimate code-upgrade exposure with the ordinance or law calculator.
Sources: 81 FR 26872 (2016); CSE, "Applying NFPA 99 to health care facilities" (2017); 26 TAC 510.121; ISO CP 04 05; In re Ace American Insurance Co. (Tex. 2026).
Measuring lost revenue: census, procedures and payer mix
Hospital income loss is counted in lost volume: patient days, admissions, ED visits, surgeries and outpatient visits. It does not take a closure. During Harvey, Ben Taub stayed open with a flooded basement, and its census fell from 345 to 307 within days.
Volume
Inpatient days and average daily census (ADC), admissions and observation stays, ED visits, inpatient and outpatient cases, imaging, lab and infusion volumes, clinic visits.
Rate
Net revenue per unit by payer (Medicare, Medicaid and managed Medicaid, commercial, self-pay), with case mix index. Payer mix means the share of revenue from each.
Continuing expenses
Retained payroll, physician and anesthesia contracts, leases, debt service and IT contracts.
Baseline
Your own 24 to 36 months of volume and payer data, to show seasonality and pre-loss growth.
The cost report cross-check
Hospitals file Medicare cost reports on forms 2552-96 and 2552-10, held in CMS's HCRIS database (the public database of hospital cost reports). NBER publishes extracts by worksheet, line and column. The carrier's forensic accountant can read the same filings, so reconcile your claim to them before they do.
Deferred or lost (hypothetical example)
Hypothetical, for illustration only; not a real hospital or client. A surgical unit is closed for 16 weeks. The carrier's accountant calls every canceled elective case "deferred" because patients will come back. The hospital's case logs show which cases were performed later in its own ORs, and which surgeons moved their cases to another facility and kept them there. Only the first group is deferred. The second is lost, and the monthly volume against the pre-loss baseline proves it.
How we build it
We do not hand the carrier one calculation. We model the loss several independent ways, against volume by service line and payer, against the state review and recertification timeline, and against the ramp back to normal census, and use those models against each other. The look-back period matters too: a soft year inside a multi-year average can drag your baseline down when it does not reflect normal operations.
Two policy terms shape the number. Standard business income coverage starts 72 hours after the physical loss, while extra expense starts at once. And after reopening, the standard form pays only 60 more days while volume recovers, unless the declarations list a longer extended period of indemnity.
Work through your numbers with the business income worksheet.
Sources: CNN (August 2017); NBER HCRIS data; ISO CP 00 30.
Extra expense: patient transfers, temporary space and staffing
Extra expense is the added cost of keeping care going. Patient moves are often the first large item. During Harvey, Bayshore Medical Center in Pasadena moved 196 patients, East Houston Regional evacuated all of its patients, and Memorial Hermann Sugar Land moved patients to its sister campus, Memorial Hermann Southwest. Across Harvey, nearly 1,000 patients were moved from medical facilities on 140 missions, and at least 16 Texas hospitals closed, per the state health department.
- Patient transfers by ambulance or airboat, and receiving-facility charges
- Moves to a sister campus
- Rental generators, fuel, chillers and water trucks
- Agency staff, overtime and staff lodging
- Temporary modular space
- Outsourced sterilization, laundry and food service
- Emergency supplies (St. Joseph Medical Center ran short of linens during Harvey)
Log each transfer with who, where, how and at what cost, plus receiving-facility charges and staff travel. Whether a move was ordered or chosen can matter under some policy wordings; that is a question for your counsel.
Sources: AMN Healthcare (August 2017); CNN (August 2017).
When the loss is off-site: water, power and access
Some of the hardest Texas hospital losses involved no fire and little building damage. The income claim then turns on coverage parts most hospitals rarely read until they need them.
Lost water
In Winter Storm Uri, two Houston Methodist community hospitals lost running water and canceled most non-emergency surgeries. During Harvey, DeTar Hospital Navarro in Victoria kept its ED open on generator power but stopped admissions until permanent water returned.
What to check: utility services time element coverage (lost income when off-site water, power or gas fails), which utilities count, whether off-site lines are included, and any waiting period.
Lost power
On July 9, 2024, after Hurricane Beryl, 16 hospitals were on generator power.
What to check: overhead transmission lines are often not covered automatically under utility services wording. Fuel, rental generators and runtime logs are claim items, and a failed generator can open equipment breakdown coverage.
Blocked access
Ambulances at first could not reach Ben Taub during Harvey.
What to check: civil authority and ingress or egress wording. Under the standard ISO form, civil authority starts 72 hours after an order bars access, requires the premises to be within 1 mile of the damaged property, and pays for up to 4 consecutive weeks. Whether your facts meet the trigger is a question for your counsel.
Spoilage
Pharmacy, blood bank, lab reagent and food losses.
What to check: the ISO spoilage form (CP 04 40) carries its own limit and deductible, and it excludes a utility failure caused by fuel shortage or government order, switching off power, and too little on-site generating capacity.
A vendor's loss
A fire at a sterile-processing vendor, oxygen supplier or key referring clinic can cut revenue without touching the hospital.
What to check: dependent-property (contingent business income) wording.
Sources: U.S. Senate Finance Committee, "Left in the Dark" (2023); AMN Healthcare (2017); AP via PBS NewsHour (2024); Rough Notes (2021); ISO CP 00 30 and CP 04 40.
Where a hospital policy draws lines
A hospital loss usually touches several coverage parts at once, each with its own limit, deductible and trigger. Surplus lines and large-risk policies often use manuscript wording that departs from standard ISO terms, and risks with $5 million or more in insured property values are exempt from TDI form approval. Read the policy you have, not a summary of it.
| Piece of the loss | Where it is usually covered | What to check |
|---|---|---|
| Building and structure | Property form | Valuation, coinsurance or agreed value, and when the statement of values was last updated |
| Imaging, OR and other medical equipment | Property form, valued per its valuation clause | Replacement cost or actual cash value; the equipment schedule; whether leased or physician-owned equipment counts as property of others |
| Generator, switchgear, chiller or boiler failure | Equipment breakdown, often a separate form with its own deductible | Freeze and power-surge damage, and where breakdown ends and resulting damage begins |
| Code upgrades | Ordinance or law, often split into parts A, B and C | Each part's limit |
| Lost patient revenue | Business income | Period of restoration and whether it runs through HHSC review and FM ARU-03 |
| Volume ramp after reopening | Extended period of indemnity | The number of days and any endorsement |
| Patient transfers, temporary space, staffing | Extra expense | How extra expense is defined |
| Off-site water, power or gas failure | Utility services | Which utilities, off-site lines, waiting period |
| Closure orders and blocked roads | Civil authority, ingress or egress | Trigger wording and day limits |
| Flood and named storm | Often excluded or sublimited, with their own deductibles | The flood definition and how the deductible is calculated |
| Pharmacy, blood bank, lab and food | Spoilage | Sublimit, and whether an off-site power failure triggers it |
| Regulated medical waste and contaminated debris | Pollutant cleanup and debris removal | Sublimits; the standard pollutant cleanup cap is $10,000 per location per year |
Coinsurance can cut every payment if limits were set on old values. Under the standard business income form, if the limit falls short of the coinsurance percentage times 12 months of net income plus operating expenses, each payment shrinks by that ratio. Check the math with the coinsurance penalty calculator.
The table reflects claims practice; confirm every row against your policy and its endorsements. How a policy applies to your facts is a legal question when it is disputed. We document the loss and present it; coverage interpretation in a dispute belongs with your attorney.
Sources: TDI commercial property filing checklist; ISO CP 00 30, CP 04 05 and CP 04 40; Open Exam Prep, BPP coverage form.
The shortfalls in these claims are predictable. So is how we fight them.
Large losses in this sector are contested on a handful of recurring fronts. None of these mean the carrier is acting in bad faith, it means the policy is complex and the default reading of it favors the insurer unless someone pushes back with documentation. Here is what they try, and what we do about each.
Smoke cleaning is limited to the burn area.
Our move: Industrial hygienist residue testing, HVAC drawings and photos of every plenum and air handler show how far the smoke went.
Imaging, OR and nurse call electronics and sterile supplies are scoped as cleanable.
Our move: Manufacturer guidance, service history and discard logs with photos and samples establish what can be saved and what cannot.
Discontinued imaging and OR models get "like kind and quality" or heavy depreciation instead of the current model.
Our move: Biomedical maintenance records, vendor end-of-support notices and current quotes with lead times.
Canceled surgeries are called deferred revenue.
Our move: Monthly volume against a 24 to 36 month baseline, case logs, and where physicians moved their cases.
The schedule ignores state review, ICRA phasing and inspections.
Our move: HHSC correspondence, ARU dates, ICRA records and written equipment lead times set the real period.
Life Safety Code and NFPA 99 work is called betterment.
Our move: We tie CMS, NFPA 99 and AHJ requirements to the ordinance or law coverage you bought.
An out-of-date statement of values is used to cut the payment.
Our move: Current values, and whether an agreed value provision applies.
The carrier's team, and what to have ready
| Carrier expert | What they examine | What to have ready |
|---|---|---|
| Cause-and-origin investigator | Where and how the fire started | Fire department and fire marshal reports, alarm panel history, the preserved origin area |
| Electrical or mechanical engineer | Failed equipment, wiring and generators | The failed components, plus service and maintenance records |
| Building consultant or estimator | Repair scope and cost | Your own scope, HHSC submittals and the code requirements |
| Forensic accountant | Lost volume and the revenue projection | 24 to 36 months of volume, payer mix, financials and cost reports |
| Industrial hygienist | Smoke, soot and mold spread | Your own residue sampling and HVAC drawings |
| Biomedical or equipment specialist | Whether equipment can be cleaned or must be replaced | Manufacturer guidance, service history and end-of-support notices |
| Salvage firm | Value of damaged equipment and stock | The inventory, and agreed salvage values in writing |
Expect an early request for records the fire codes already require, starting with at least 24 months of sprinkler testing records. Questions about cause (such as an intentional fire or contractor hot work), impaired fire protection, overdue testing, late notice or concurrent causes such as wind and flood can lead to a reservation of rights. The State Fire Marshal ruled the 2017 John Sealy construction-zone fire arson.
Policies typically require a sworn proof of loss and allow examinations under oath. Under the standard ISO conditions, the proof of loss is due within 60 days after the insurer asks for it. Build the document set before an examination, not during it; deadlines and consequences under your policy are questions for your attorney. Carriers may also take title to damaged equipment, so agree salvage values in writing, and give notice before disposing of failed parts the carrier may use to pursue a manufacturer, contractor or utility.
Sources: Montana DPHHS Life Safety Code Maintenance Manual (2017); ABC13 (March 2017); ISO CP 00 30.
Lessons from Harvey, Uri, Beryl and two Texas hospital fires
Texas's recurring perils have closed or degraded hospitals without a single flame. Across all Texas businesses, TDI counted 4,948 business interruption claims with $179.5 million paid after Harvey, and 7,237 business interruption claims with $519.5 million paid after the February 2021 freeze.
| Date | Incident | What happened | Lesson for a claim |
|---|---|---|---|
| July 2024 | Houston-region hospitals, Hurricane Beryl | 16 hospitals on generator power on July 9. Lt. Gov. Dan Patrick said a sports and event complex would hold up to 250 patients awaiting discharge to homes without power. | Fuel, generator rentals, runtime logs and discharge bottlenecks are claim items. |
| February 2021 | Austin hospitals and two Houston Methodist community hospitals, Winter Storm Uri | Lost water pressure, heat or running water; most non-emergency surgeries canceled. DSHS counted 246 deaths statewide in the storm. | Freeze claims pair burst-pipe damage with income lost to a utility failure. |
| August 2017 | Ben Taub General Hospital, Houston, Harvey | Basement flooding and a burst sewage pipe shut parts of the kitchen; census fell from 345 to 307. | A hospital that stays open still has partial-interruption and access losses. |
| August 2017 | Bayshore Medical Center, Pasadena, Harvey | 196 patients moved and services suspended. | Transfer logs and costs anchor the extra expense claim. |
| August 2017 | MD Anderson Cancer Center, Harvey | Floodwater in the lobby; the main center and three suburban sites closed. | One event can close several locations; list each site and its dates. |
| August 2017 | St. Joseph Medical Center, Houston, Harvey | Floodgates held and the hospital stayed open, but ran short of linens. | Mitigation pays off; document what it cost. |
| January 4, 2017 | John Sealy Hospital, UTMB Galveston | A construction-zone fire sent smoke to the ninth floor; 43 patients went to local emergency rooms and hospitals, and the State Fire Marshal later ruled it arson. | Smoke and water reach far past the fire floor; construction zones need impairment and hot work records. |
| April 10, 2015 | Baylor University Medical Center at Dallas | A patient-floor fire moved several patients, some to another area of the same floor; no injuries were reported. | Even a quickly controlled fire moves patients and starts a cause investigation. |
Coastal hospitals face wind, flood and utility risk in one event, so a single storm claim often splits across three coverage parts with different deductibles. Record the cause of each item of damage separately.
Hospitals also absorb the losses of the facilities around them. After Hurricane Ike, nursing home and assisted living residents who depended on medical equipment were sent to hospitals, straining hospital resources. If you also operate senior living, see our senior living fire claim page.
Related tools: Business income worksheet, Coinsurance penalty calculator, Ordinance or law calculator, Texas prompt payment deadlines.
Sources: TDI Harvey and February 2021 claim data; AP via PBS NewsHour (2024); Senate Finance, "Left in the Dark" (2023); CNN and AMN Healthcare (2017); Galveston County Daily News and ABC13 (2017); CBS Texas (2015); Texas House bill analysis, HB 1710 (2009).
Documents to pull this week
Pull these in the first week, before cleanup and while staff still remember. The carrier will ask for most of them.
Event and scene
fire department and fire marshal reports, 911 records, and the event history from the fire alarm panel and building management system; photos and video of every affected room, plenum, air handler and corridor before cleanup; a map of sprinkler discharge zones; fire watch and impairment logs; contractor and vendor records, including hot work permits; correspondence with HHSC, the CMS state survey agency, your accreditor, the building official and the fire marshal.
Life safety and maintenance
sprinkler inspection, testing and maintenance records for 24 months; fire alarm and smoke detector tests; generator weekly, monthly and annual test logs, transfer-time records and fuel deliveries; emergency lighting, extinguisher and damper tests; kitchen hood cleaning and suppression service; fire drill records for 12 months; life safety drawings, past HHSC approvals and plans of correction.
Patients and operations
emergency plan activation and communications logs; patient transfer log (who, where, how and at what cost); transfer agreements with receiving facilities; the emergency power plan required under 42 CFR 482.15(e); a department-by-department list of services closed, reduced or moved, with dates.
Property
fixed-asset register with serial numbers, purchase dates and prices, service contracts and biomedical maintenance history; leases for leased equipment and agreements for physician-owned equipment; statement of values, the full policy with all endorsements, broker correspondence and prior loss runs; logs and photos of discarded sterile supplies, pharmacy stock and food.
Financial (24 to 36 months)
monthly patient days, ADC, admissions, ED visits, surgeries and outpatient visits; payer mix and net revenue per unit by service line; monthly financials, budgets, forecasts and payroll registers; filed Medicare cost reports; physician, anesthesia and staffing contracts; a separate cost center or GL code for every loss-related expense.
Rebuild and reopening
HHSC application package, TULIP submittals and any self-certification documents; the ICRA for each repair phase, with barrier and pressure monitoring records; equipment quotes with written lead times; inspection reports, plans of correction and Form FM ARU-03; local permits and approvals.
Sources: Montana DPHHS Life Safety Code Maintenance Manual; 81 FR 26872; Upstate Medical University emergency preparedness crosswalk; HHSC Architectural Review Unit; UNC SPICE; NBER HCRIS.
The insurance company's adjuster works for the insurance company.
After a major loss, the carrier sends its own adjuster, and often a forensic accountant and engineering consultants, all retained by the insurer. They are competent and they are not neutral; their job is to resolve the claim on terms favorable to the company that pays them. A public adjuster is the licensed counterweight: we represent the policyholder only, we build and present the claim, and we negotiate the settlement.
On a hospital loss the asymmetry is the whole problem. The carrier brings cause-and-origin investigators, engineers, building consultants, forensic accountants, industrial hygienists, biomedical equipment specialists and salvage firms. We document the full loss with the same rigor, and we are paid a percentage of what we recover, so our incentive is your number. We are licensed public adjusters, not attorneys: when a question turns on how the law or the policy language applies in a dispute, on regulatory compliance, or on liability to patients, we work alongside your attorney and compliance counsel rather than in place of them.
What happens after you call.
Loss review and policy analysis
We read the actual policy - limits, specialized-equipment and leased-equipment provisions, BI and extra-expense, ordinance-or-law, exclusions - and assess the full scope before anyone commits to a number.
Document everything to healthcare standards
Structure, equipment, and contamination across patient and sterile areas. We bring in industrial hygienists and coordinate with infection-control specialists to document what must be replaced, with moisture mapping and environmental testing, while the evidence still exists.
Build the business-interruption claim - modeled several ways
From real service-revenue and financial records: lost revenue by department, the recertification timeline, diversion costs, and the right look-back baseline, modeled independently and used against each other to substantiate the full loss.
Present, negotiate, and settle
We present the documented claim, contest the predictable shortfalls, and negotiate the settlement on your behalf through to resolution.
Questions hospital and medical-facility administrators ask.
What should a hospital do in the first 72 hours after a fire?
Protect patients and staff, then protect the record. Watch the sprinkler outage clock, keep the origin area and failed parts intact, photograph every affected room, plenum and air handler before cleanup, and log anything discarded. Give written notice to every policy that may respond, open a cost center for the loss, and contact HHSC before construction starts.
Does a Texas hospital need HHSC approval before repairing fire or storm damage?
Yes. HHSC's Architectural Review Unit requires an application package and written approval before disaster repair work starts, and Form FM ARU-03 is required before patients occupy the repaired space. Questions about other notices, such as to the CMS state survey agency or your accreditor, belong with your compliance counsel.
How long does HHSC architectural review take?
HHSC says about 120 business days, depending on project size. Registered architects and engineers can use a self-certification option. Either way, that time belongs in your period of restoration, and the carrier's schedule should reflect it.
Our sprinklers are out of service. Can we keep patients in the building?
Under the CMS fire safety rule, if a sprinkler system is out more than 10 hours in a 24-hour period, the facility must evacuate or post an approved fire watch until it is restored. Keep the fire watch and impairment logs; the carrier will ask for them.
Does business interruption insurance cover canceled elective surgeries?
Expect the carrier to call canceled cases deferred rather than lost. The real question is which cases came back. Case logs, monthly volume against your pre-loss baseline, and records of where physicians moved their cases show which cases were truly lost.
How is a hospital's lost revenue calculated?
By service line and payer: lost units, such as patient days, admissions, ED visits and surgeries, times net revenue per unit, minus expenses that did not continue. It rests on 24 to 36 months of your own data and should reconcile to your filed Medicare cost reports, which the carrier can also read.
Are patient transfer costs covered as extra expense?
Transfers are often the first large extra expense. Log each one with destination, transport mode and cost, plus receiving-facility charges and staff travel. Whether a move was ordered or chosen can matter under some wordings; that is a question for your counsel.
Will insurance pay to bring repairs up to the current Life Safety Code?
Only to the extent of your ordinance or law coverage. The ISO endorsement covers the undamaged portion torn down, demolition, and the added cost to rebuild to code, and that last part pays only if you actually rebuild. Without it, the base form's code coverage is the lesser of 5% of the building limit or $10,000.
The city water or power is out but our building is fine. Is that covered?
Lost income from an off-site water or power failure needs utility services time element coverage. Check which utilities count, whether off-site and overhead lines are included, and any waiting period. Burst pipes on site are a property claim.
Can we replace damaged imaging and OR equipment with current models?
That depends on the valuation clause. For models no longer made, expect a "like kind and quality" argument. Biomedical maintenance records, vendor end-of-support notices and current quotes with lead times are the evidence.
What records will the insurance company ask a hospital for?
Expect records the codes already require: at least 24 months of sprinkler testing, generator test logs, fire drill records and fire watch logs. The forensic accountant will ask for 24 to 36 months of volume, payer mix, financials and cost reports.
What's the difference between a public adjuster and an attorney on a hospital claim?
A licensed public adjuster documents the loss, builds and presents the claim, and negotiates the settlement for the policyholder. Texas law bars public adjusters from practicing law. Coverage disputes over policy wording, regulatory compliance, liability to patients and examinations under oath belong with your attorney. On large losses, the two often work side by side.
What does it cost to hire a public adjuster?
We work on a percentage of the recovery, with no upfront cost. We're only paid if and when you recover, which aligns our incentive with maximizing your settlement. Fee specifics are discussed up front before you commit to anything.
Tell us what happened. We'll tell you straight whether you have a fight worth having.
No cost, no obligation. The fastest path is the phone - for a major loss, call and talk to a person today. A licensed Texas public insurance adjuster will review the loss with you.
713-369-4300Start a claim review
Tell us what happened. A licensed Texas public adjuster will review the loss with you, and tell you straight whether you have a fight worth having. The review is free.
For fire claims, we call you back within 1 hour and visit your property within 24 hours or less.
A major loss is decided in the first moves. Make yours count.
Talk to a public adjuster who works only for you. No upfront cost - we're paid a percentage only if you recover.
713-369-4300Crossroads Insurance Recovery Advocates · TDI License 1924788
This page is general educational information about commercial property claims, not legal advice or advice on your specific claim. Crossroads Insurance Recovery Advocates, Texas public adjuster entity license #1924788.
Don't take our word for it
- Texas HHSC: Architectural Review Unit
- Federal Register: Fire Safety Requirements for Certain Health Care Facilities, 81 FR 26872 (May 4, 2016)
- USFA: NFIRS Data Snapshot, Medical Facility Fires, 2014 to 2016
- HFM: Codes and enforcement credited with decline in fires (January 2014)
- HFM: October 2021, NFPA interview
- HFM: Engineering department reports skyrocketing lead times (September 2022)
- iRecruit: Construction procurement, long-lead equipment (June 2026)
- BLS: Producer Price Index Detailed Report, Table 2
- CSE: Applying NFPA 99 to health care facilities (2017)
- CSE: Protecting a vulnerable population (2008)
- UNC SPICE: Construction and Renovation training module (ICRA)
- Montana DPHHS: Life Safety Code Maintenance Manual (2017)
- Upstate Medical University: emergency preparedness crosswalk
- 26 TAC 510.121: private psychiatric hospital renovations
- 26 TAC 509.62: freestanding emergency medical care facility reporting
- HHSC Form 6109: Special Care Facility Incident Report
- Texas House bill analysis: HB 1710 (2009)
- NBER: Healthcare Cost Report Information System (HCRIS) data
- Galveston County Daily News: Hundreds evacuated from UTMB hospital because of fire (January 2017)
- ABC13: John Sealy Hospital fire is ruled arson (March 2017)
- CBS Texas: Patients moved after fire at Baylor Medical Center Dallas (April 2015)
- CNN: Harvey and Houston hospitals (August 2017)
- AMN Healthcare: How hospitals are coping with Hurricane Harvey (August 2017)
- U.S. Senate Finance Committee: Left in the Dark (February 2023)
- AP via PBS NewsHour: Hurricane Beryl leaves millions in Texas without power (July 2024)
- TDI: Hurricane Harvey final data compilation
- TDI: February 2021 winter weather summary
- TDI: Commercial property filing checklist
- Tex. Ins. Code §542.051
- Tex. Ins. Code §542.055
- Tex. Ins. Code §542.056
- Tex. Ins. Code §542.057
- Tex. Ins. Code §542.059
- Tex. Ins. Code Chapter 4102 (public adjusters)
- ISO CP 00 30 10 12 business income form (specimen)
- InsuranceXDate: CP 04 05 ordinance or law
- InsuranceXDate: CP 04 40 spoilage
- Open Exam Prep: BPP coverage form
- Rough Notes: utility services coverage (2021)
- Texas Supreme Court: In re Ace American Insurance Co., No. 25-0461 (2026)