When Bannack State Park was inundated by flash flooding during the height of tourist season last July, cleanup crews arrived with bulldozers and truckloads of equipment within 48 hours thanks to disaster recovery contracts already in place.

“It happened all of a sudden. Several inches of rain fell in a short period of time,” said Brett E. Dahl, Helena, Mont.-based director of the Risk Management and Tort Defense Division for the state of Montana. “It washed tons of debris, including mud, bones, Sears catalogs from 100-plus years ago, into the city. We preserved what could be retrieved and did some loss mitigation, digging a bigger storm drain to prepare for potentially larger floods.”

Because of the magnitude of the loss and the historic nature of the affected properties at the gold rush ghost town, many members of state government didn't think the park would ever recover. But when it reopened less than eight weeks later on Sept. 9 with improved flood mitigation to protect Montana's first territorial capital from similar catastrophes in the future, Mr. Dahl's risk management division received the “Agency Supporter of the Year” award from the Department of Fish, Wildlife and Parks for its crisis response.

“This is in a remote area of Montana, so getting that many qualified guys there in the middle of summer ... was pretty remarkable,” said Gordon Amsbaugh, senior claims specialist for the risk management division.

State lawmakers were even more impressed by the fact that the damage, affecting 62 of 80 historic buildings in the park and estimated at $2.6 million, was covered by property insurance, said Sheila Hogan, director of the Montana Department of Administration, which oversees the Risk Management and Tort Defense Division.

“The governor's chief of staff called me in disbelief after the Bannack flood,” Ms. Hogan said. “She asked, "Are we really covered?' People don't get it.”

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The property insurance, underwritten by Boston-based Lexington Insurance Co., a unit of American International Group Inc., paid the cost of the claim above a $1 million deductible. And with the “Red Alert” contract that the state's insurance broker, Alliant Insurance Services Inc., negotiated with disaster recovery firm Belfor USA, the crisis response was almost immediate, he added.

Other high-profile losses were handled in similar fashion, including an $8.1 million hail storm in Bozeman in June 2010 and a $1.5 million electronics loss at the Montana State Data Center in Helena in April 2011 that occurred after one of the compressor units failed, blowing a contaminant into a room that housed the state's servers.

“It's the heart and soul of state government's data,” Mr. Dahl said. Fortunately no important data was lost, he said. And because the loss occurred before Mr. Dahl negotiated a higher deductible for the state's property insurance program, Lexington paid that claim less a $500,000 deductible, he said.