The natural reaction from someone whose business has just suffered fire damage is to clean up, tidy up, use all the help from neighbours and friends you can
This can be a big mistake. We are finding more and more that the process of dealing with liability investigation is slower and slower. Insurers may take between four and six weeks even in the most straightforward of circumstances to complete investigation.
The process involves:
- 1. Loss Adjusters visit & interview
- 2. A Forensic Investigation & testing
- 3. A claims history & disclosure investigation
- 4. An interview by Insurers or their solicitors
- 5. Alarm system activation logs and other reports
All before liability is accepted.
Our advice in all cases is to do nothing until insurers accept liability. If you clear the site, your insurers may well claim you have prejudiced the investigation and delay or go negative on a decision.
You may then have a defence that you cannot contest the decision if the scene is cleared or bring your own forensic investigation.
The time it takes for Insurers to decide will not be wasted. You can start planning & preparing for reinstatement:
- Get your drawings & specifications lined up
- Get prices from the builders
- Talk to suppliers
- Decide how the process of reinstatement can happen
During this period claim documents will be prepared for all losses insured:
- Computers Stock
Supporting documents like Invoices & quotations will be required in each section of the claim. You may also need engineering reports or structural surveys or machine maintenance reports.
Once Insurers are on board and claim is submitted, there is a negotiation process which again could take from four to eight weeks more.
Works may start in the meantime but you are still exposed if your costs are not in line with insurers’ proposals or worse, parts of the loss are underinsured or not at
all. You then have a balancing act to manage.
We all have difficulties with banks in Ireland today. You may not be in a position to borrow funds to support the reinstatement costs to fix and repair the damage, let
alone make improvements. This means you may be fully dependent on your insurers and insurance policy to pay for the damage.
Even when agreement is reached, the process is not complete. Your insurers will
pay part of this settlement, the balance being payable when the company re-check
your repairs and the cost of repairs to ensure that the terms & conditions of the
policy and the settlement are met.
This final stage is just as important as the start of the process.
See the photos above. The building and business were destroyed in about two hours despite the fact that it
happened during the day with people present and discovered very quickly.
The Fire Brigade were on site within thirty minutes of receiving the call. The fire started at a fuseboard for no clear reason but was out of control and frightening
Buildings, stock, machinery, computers, stationary, cash, books and records including creditors and debtors information were completely destroyed.
There was also a risk of water supply pollution from destroyed chemicals and disposal of debris. There were no personal injuries
Within a week, the property was raided and burgled. New goods were stolen because deliveries arrived and adequate security was not in place.
It took six to eight weeks before the insurance company accepted liability and transferred any money. Investigations were ongoing by Gardai, Loss Adjusters, Loss Assessors, Forensic Investigators, Private Investigators and the insurance company themselves.
Investigators reviewed every aspect of the owner the company's and personal financial status and insurance and business history for the past eight to ten years before
they were satisfied that they could not avoid liability.
Things to watch out for:
1. Are you and your business insured for enough?
Correct ‘Value at Risk’ & Sums Insured is critical when this happens
especially Stock & Business Interruption. Time for Business Interruption is
critical. The owner moved very quickly but it still took fourteen to fifteen months to rebuild the
business. Review this now with Clearys.
2. Do not rely on your own information or your Accountants, Broker, Solicitors, Architects or Quantity Surveyors to sort out a major claim.
The policy does not deal with payments or calculations of the loss in the same way they deal with normal business. For example, the owner's accountant inadvertently could have cost them and the company significant amounts by presenting information to the insurance
company too early. Clearys Assessors had the experience to spot this.
3. Back up all your records off site and test it today. Assume everything is gone and you want all of your records today – can you do this?
4. Use an experienced Loss Assessor to deal with all losses. Contact Clearys Claims Managers for pre-fire and post-loss advice.