On 9th January 2014, a fire caused extensive damage to the basement and ground floor showrooms of a furniture wholesaler and distributor. Thompson & Bryan were appointed to deal with the claim on behalf of the insured, via the DAS Loss Assist scheme.

At the request of the broker, we were asked to attend site shortly after the fire to speak with the insured and deal with the loss adjuster on their behalf.  The fire had started in an area which displayed animatronics animals and had rendered the ground floor and basement display areas unusable. All the stock in these areas was clearly condemned. Luckily, three further smaller showrooms and the offices were only smoke damaged and limited trade could continue from these areas.

 
Even though policy liability had was yet to be accepted, we agreed in principle measures that would enable the unaffected areas to be returned to a condition that would allow customers to visit. We organised for all the stock throughout the premises to be scheduled and arranged for a surveyor to attend and prepare strip out and reinstatement schedules.

The insurance company instructed a forensic investigator to establish the cause of the fire and to take statements from the employees and interrogate the alarm and CCTV footage. As these investigations continued, there was the possibility that the suggested cause of the fire could result in the insured being in breach of the requirements under the policy but certain mitigating factors needed to be presented to insurers for them to consider. We therefore advised our clients that they should instruct their own firm of forensic investigators and we provided them with details of a company whom we would recommend.  Upon our advice, the investigator was instructed and he attended site and conducted his own investigation into the fire. He also began the task of analysing the conclusions of insurers forensic and met with him to review the statements and CCTV recording. At each stage of the process a member of the Thompson & Bryan team was working alongside the Consultants and managing the claim whilst the policyholder could focus on the business and the recovery.

The appointment of an independent forensic investigator was also important to support the policyholder in pursuing potential third parties whose actions may have caused the fire. This would enable the insured to look to recover any uninsured losses that fall outside the scope of the policy.

As investigations continued, a number of potential causes were identified and one by one these were explored jointly by our own investigator. Importantly, any suggestion that the fire was started deliberately by the insured or by an act excluded under the policy, was swiftly dismissed.

This left a number of further causes to be considered but insurers were now in a position to confirm liability. A formal acceptance of policy liability was received before the end of January, some three weeks after the date of the fire.

During this process we kept in close contact with the insurance broker and provided them with regular updates as to the investigators findings. This enabled the broker to make separate representations directly to insurers in support of the policyholder.

Our clients had chosen not to include business interruption cover as part of their cover but did have a substantial sum insured to cover additional costs of working. As part of the building was only smoke damaged to varying degrees, we agreed that this section of the policy would pay for cleaning and renovation costs that would enable trading to recommence from this area.

 
Our clients are particularly resourceful and decided they did not want to incur the cost of surveyor to prepare a schedule of repairs that would be issued to tender. They obtained their own quotations for the works which we presented to the loss adjuster. Based upon this we agreed a budget that insurers would contribute towards the cost of the building repairs. To assist with the initial expenditure we also agreed a considerable interim payment and a process that would allow further funds to be released well in advance of costs exceeding payments on account.

Despite being given the correct advice and guidance by their brokers, our clients chose to insure the building at a figure that raised questions as to the adequacy of the sum insured. As they chose not to incur the costs of a surveyor, which could have added a figure of £40,000 to the claim, we were able to successfully argue that insurers could not include such costs in the value at risk calculation. We eventually agreed that the building sum insured was adequate and that the claim would be paid in full.

As the reopening date approaches, we have suggested that insurers should assist with the costs of this, funded out of the additional ICOW claim. Our clients are planning to formally invite their customers to visit the refurbished premises for an official opening day. We have asked our clients to provide proposals for the reopening and the costs associated with this and a submission will be made to the loss adjusters for consideration.

T&B Comment:
As the cause of the fire was not known, it was important that the policyholder’s interests were fully represented. The combined efforts of all parties, the investigator, broker and us, culminated in a positive result being reached.

“This is the first experience of having to utilise the services of DAS loss recovery for such a large claim.  Thompson & Bryan were appointed and immediately on the same day as the event occurred their representative John Leivers was on site at the same time as the insurer’s loss adjuster.  From that point on the co-ordination between John Leivers from Thompson & Bryan, our client, the insurer’s loss adjuster and ourselves (the broker) has been seamless.  The service provided to our client was handled with extreme professionalism taking into account the stressful circumstances.  We felt that our client was assisted to the best possible means allowing him to continue to run his business without having too much distraction having to deal with the complex claim himself.

“We would recommend the service provided by Thompson & Bryan is outstanding and loss assist cover is a vital component of insurance cover for our clients.”

Amanda Elkington,
Compliance & Claims Manager
Inspire Insurance