In a late August evening in the small town of Northwood, N.D., disaster struck as a tornado ripped through this community of about 950 residents, just 30 miles southwest of Grand Forks. According to eye witness reports, it took only moments for the F-4 tornado to cause chaos and destruction for the town.

Path to recovery

Officials with Nationwide Agribusiness Insurance Company point out that in a disaster such as this, business owners and employees get a double whammy. They may be trying to cope with damaged homes as well as damaged businesses and the ability of those businesses to operate again can affect whether and when there is income necessary to pay the bills. Employees may wonder if they still have jobs. Customers wonder if they'll be able to get products and services.

Getting back to business quickly helps to meet several important goals: showing employees and customers you are committed to rebuilding, meeting processing and delivery commitments, restarting the cash flow, as well as providing a sense of hope and renewed normalcy as residents watch vital businesses come back to life.

Although damage was extensive at the Northwood Equity Elevator, there was some good news.  There were no injuries among the elevator's seven full-time and two part-time employees and their families. Storage buildings were leveled, but no chemicals spilled. Propane tanks were toppled, but none leaked.

That's not to say the situation wasn't serious. The elevator's office roof was gone, causing extensive water damage inside. The head house had blown over and was dangling dangerously. The tops of most bins were blown off, and wheat and corn were wet. A new conveyor on top of four new 80,000 bushel bins (three full of wheat, one full of corn) was torn off and also left dangling.

Gary Bilden, Ag States Group insurance agent for the Northwood Equity Elevator, lives in Northwood, as do many members of his extended family. He recalls an eerie scene that night, driving back into town following the tornado.

"Everything was black. There was no electricity," Bilden recalls. "What we could see we saw through flashes of lightning. I saw the top of the grain elevator was gone, the tops were gone off the steel bins, and the steel bins were squashed like pop cans. My son and I tried to drive around to check on family and neighbors, but all the streets were blocked with downed trees. We had to abandon my car."

Timing crucial

For grain elevators, as for many agricultural businesses, timing is everything and in the case of the August tornado, timing meant questions over wheat harvest. Bilden tells of a local farmer who indicated he still had three to four trucks on his farm filled with wheat. The farmer wanted to bring it to Northwood, but until the facility was operable again, he was left waiting. Bilden estimates that 20 to 25 percent of the wheat harvest was still outstanding when the tornado struck.

Scott Ostlie, general manager of the Northwood Equity Elevator, also lives in Northwood. Without damage to his own residence, he was able to concentrate on recovery operations at the elevator.

"At first I didn't realize how much damage had occurred," Ostlie said. "Most of the structures were still standing. I think I was in shock. Then, I saw the roof was off the office and there was a lot of water inside, the tops had blown off the bins, the head house was dangling off the side of the elevator." Ostlie said it took him about half a day to realize just how much damage had occurred.


Ostlie had much to be worried about. He was worried about the safety of employees and others existing below damaged materials still hanging from the elevator. He knew there was considerable wheat still out there and wondered if the elevator could be operable in time for the last of the harvest. And finally, he worried because soybean harvest was only about three weeks away, followed closely by corn.

Ag States Group writes the elevator's property insurance coverage through Nationwide Agribusiness. It soon dispatched the team of Randy Mehrer, Shane Swanson, and Aaron Enge in Northwood to begin the damage assessment Monday afternoon.

Mehrer, a property large loss claims specialist, immediately began calling his contacts in construction and salvage, receiving commitments from multiple contractors and ordering necessary parts. Salvage operations also began the day following the disaster. A generator-powered temporary office facility was up and running two days later. Grain was shipped to other grain elevators in the area that made offers to help. Elevator employees were the first in line to be hired for clean up to ensure they would continue receiving paychecks even while the facility was recovering.

Priorities for recovery

Working closely with Ostlie and using his vast experience with large loss recoveries, Mehrer identified the elevator's recovery priorities.

"Each loss I see is different based on the circumstances," Mehrer points out. "The one thing most have in common is a goal of getting back in business quickly so we work closely with the management team to develop the recovery plan."

"For Northwood, first and most importantly, we want to get the main concrete elevator up and running," Mehrer explained. "That's critical for the remaining wheat harvest and to be ready for corn and soybeans. Second priority is grain salvage. We want to save as much inventory as possible as quickly as we can. While that's happening, we'll get a temporary roof on and electricity back in to get the office up and running so computer records can be accessed. Finally, we'll work on repairing the steel storage buildings and other structures."

Ostlie said good working relationships with insurance representatives who are responsive are key to recovery following a disaster. He notes that his agent arrived by 7 a.m. the morning following the storm, while his claims adjuster was there by that afternoon. "They've done all this before. I haven't. I wasn't sure which direction to go, but they've taken over the recovery efforts and gotten everything lined up. I'm relying on their knowledge and expertise," he said following the disaster.

Ostlie's most immediate concern was getting at least partially operational again in order to do business. Another urgent concern was a major issue with grain quality that needed attention. As recovery got under way, he said his goal was to become fully operational again within the month.

Northwood Equity Elevator was able to receive an advanced claim payment from its insurer the first week and was also guided along by agency representatives as it worked to get back in business and become available for the waiting remainder of the wheat harvest and the corn and bean harvest just on the horizon.

As the first week of the devastating tornado wound to a close, a temporary office was up and running, and repair and salvage operations were well underway. Northwood Equity Elevator's corn and soybean harvest goals were well within sight.