Prearranged contracts and service agreements with restoration companies and critical vendors and providers can save companies and organizations crucial time when rebuilding after a natural catastrophe.

Such agreements not only help damaged businesses get up and running quickly following natural disasters, but also affect business interruption insurance deductibles and claim payments, experts say.

Prearrangements such as these are part of a larger emergency crisis management planning process, said Stephen Truono, vice president of global risk management and insurance at Stamford, Conn.-based Starwood Hotels & Resorts Worldwide Inc.

An emphasis on prearranged agreements for Starwood is crucial, as “most of our hotels are located where the wind blows and the ground shakes,” Mr. Truono said.

“One of the core fundamentals in the preparedness manual, which is part of this (emergency crisis management plan) procedure, is identifying critical business partners and vendors and establishing a connectivity where you can, and prioritizing services where necessary,” he said. He also noted the importance of identifying and engaging alternative vendors or suppliers.

The importance of established agreements was never more evident than after Hurricane Katrina in 2005, when Starwood's Sheraton was the only hotel in New Orleans that remained open during the hurricane and its aftermath, Mr. Truono said.

The hotel sheltered 700 guests and 500 employees, and became the central headquarters for local police and rescue workers.

“It's about having that plan and practicing that plan and engaging the necessary critical vendors,” Mr. Truono said, such as power, plywood, diesel oil and potable water providers, among others.

Such agreements are basic contingency planning, said Alfred P. Tobin, New York-based managing principal and national property leader for Aon Risk Solutions.

“You'd be surprised how many small companies — or even large companies — have not invested in simple things like alternative power,” he said, noting that established contracts with remediation firms can get rebuilding efforts started quicker.

Prearranged provider agreements are not expensive and are valuable to have in place, Mr. Tobin said.

Above all, an established catastrophe plan is critical before a company or organization engages provider contracts, said Dave Boyle, head of property claims for Zurich North America in Schaumburg, Ill.

“Before you can properly identify the right vendors, you have to have a fully developed catastrophe plan or disaster plan against which you can run mock exercises ... so that it fleshes out where you may have gaps in your business continuity plan,” Mr. Boyle said.

A company that provides water extraction and water mitigation is one of the most important agreements organizations should have in place before a disaster, he said.

Other agreements include contracting for alternative power supply, alternative communication resources and off-site redundant data systems.

Such arrangements can limit business interruption-type claims or interruption to business services and operations, Mr. Boyle said.

“Obviously, that has dramatic impact on the length of time that their revenue is impacted, which in turn has a dramatic impact on both their deductibles, as well as our ultimate payouts on the claims side,” he said.

The Norfolk, Va., public school district faces considerable wind and flooding risks, said Dan Hurley, senior director of risk management and safety for Norfolk Public Schools.

“We have cooperative agreement language in contracts ... that allows a lot of us to share the contract,” Mr. Hurley said. “So if somebody has something that's attractive for us to piggyback on, we'll actually jump on that.”

One of the school district's contracts is with a water extraction company, Mr. Hurley said.

“What we're trying to do at that point also, besides get the water out, is to keep the mold out,” he said. “If we can quick-dry and dehumidify and blow air through, we can not only dry the building out, but keep the mold from getting in.”

Many organizations recognize the importance of established contracts for rebuilding after a catastrophe, but few take steps to create specific relationships with providers to execute against such exposures, Mr. Boyle said.

“Very few of them address some of the redundant issues and backstops, such as communication or alternative power,” or contemplating water extraction in advance, he said.

A best practice when arranging contracts with critical service providers and restoration firms is to establish relationships in advance, said Michelle Cross, Boston-based national practice leader for business continuity at Wells Fargo Insurance Services USA Inc.

“For any service provider to really provide quality, top-level, appropriate service, they have to know about the company they're working with,” Ms. Cross said.

“They get to know your company, they get to know what you then need and what hazards you have on-site,” she said, noting that prearranged agreements typically do not include a fee until the time of service.