Case study: The role of insurance brokers on large loss claims
By Oscar Camilleri
For most claim handlers who deal with property insurance our role can become somewhat repetitive with regards to the types of claims that we deal with daily. However, what if you are suddenly faced with the unexpected, or a complex large loss? This is where having a competent insurance broker with experienced and talented staff truly shows its value!
Below is one such case of a complex large loss reported by one of our clients, the difficulties we encountered and how we assisted.
The incident
The claim was in relation to a large residential block housing 120 individual flats and several commercial/retail units at ground level. During the early hours of the morning a group of intruders used battery operated power tools to force entry into the plant room of the building and proceeded to cut a section of the main electrical cable supplying power to the building. This resulted in a complete loss of electricity which amongst other things was needed to supply running water, heating, and power to the fire & security alarm systems for the block. Police and emergency services attended the site where due to lack of a working fire alarm system & basic amenities, the fire services immediately condemned the building as unsafe and ordered everyone to evacuate.
Specific issues we encountered and how we helped
1.The issue: Based on the information provided by the client (the managing agent), we immediately assessed that this would be a large complex loss (more than £100k).
How we helped: We immediately contacted the insurers, providing them with a description of the circumstances. In addition, we requested that the file be allocated to their major loss team, and for a complex loss adjuster to be instructed and attend the location urgently. We also assisted in organising virtual meetings between the client, insurers, loss adjuster and other relevant parties to formulate an action plan, expedite the reinstatement and minimise delays.
2.The issue: We were suddenly faced with the situation of having 120 families being rendered homeless. This was further complicated by the fact that most of them were from low-income backgrounds, and the lack of available alternative accommodation in the area.
How we helped: As brokers we immediately confirmed cover was in place to mitigate the potential cost of this, and relayed the situation to both the insurers and loss adjuster whilst stressing the importance of organising alternative accommodation urgently. The client (managing agents) together with the loss adjuster liaised with various letting agents and local authorities to provide vacant properties and convert various town halls & sports centres into emergency shelters, with the insurers agreeing to reimburse these costs.
3.The issue: Due to the CCTV & security alarm systems not being operational, there was an added risk of the building being targeted again.
How we helped: We identified that the policy included Loss Minimisation cover which puts a duty on the insurers to financially assist in putting measures in place to lessen or prevent further damage. We informed the insurers of this who agreed to contribute towards the cost of having a security guard 24/7 on site until the security systems could be reinstated.
4.The issue : Due to the impact of the incident on the local community and the residents involved, the client was constantly approached by various radio stations and news outlets for comment, leading to concerns about bad publicity.
How we helped: We quickly identified that the policy included cover towards the cost of hiring a media relations specialist. However on this occasion it was not deemed necessary and instead the insurer’s own media relations team assisted the client with preparing statements to give to the press and to inform residents.
5.The issue: The incident placed an additional financial burden on the client (managing agents). The building was approximately 200 miles away from their head office and there was a requirement to travel to the site multiple times to meet with various contractors and claims experts. Many hours were spent on phone calls, emails, and tasks to facilitate the reinstatement and to get the occupants back into their homes.
How we helped: We informed the agents that the policy would include cover for their additional fees, if they could demonstrate that they were for duties over and above their day-to-day obligations. Therefore, the travel costs and most of the hours spent in dealing with this incident could be billed to the insurers and included within the overall cost of the claim.
6.The issue : The overall cost of the claim was circa £600k. This, together with an historic adverse claims history, resulted in the building being deemed too high of a risk to insure, and no single insurer was willing to offer cover at renewal.
How we helped: After lengthy negotiations, our broking team convinced the current insurer to partner with two other major insurance companies; with each taking a percentage of the risk and a share of the premium and any future claims. This allowed the client to meet its insurance obligations for the block, and also ensured continued protection of the leaseholders’ financial interests.
Albanwise Insurance Services is proud to have a knowledgeable team with years of experience. Should you have any queries, contact us here
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