Excellent result for Kent firm using CCS appointed panel member

A major fire effectively destroyed a Kent company's finished goods storage warehouse and caused extensive collateral damage to a neighbouring processing unit on Monday, August 8, 2011.

The severe fire damage to buildings, stock and machinery had a major impact on the operation of PPR Wipag's automotive plastics recycling facility, causing a total loss in excess of £500,000.

Immediate Actions

Thompson & Bryan, who are members of CCS’s claims panel secured instructions and attended the site the same day to meet the insured, gain an initial appraisal of the nature of their business and the extent of damage caused by the fire.

Immediate discussions focussed on loss mitigation and the nature of their manufacturing processes to identify how the business could be maintained to service its customer base.

T&B’s team of qualified and experienced staff worked continuously with the insured and their staff from day one to ensure the business continued as far as was practically and economically possible during the indemnity period through to agreement of the final claim circa 15 months later.

Settlement

The claim was ultimately settled on an overall negotiated basis to the benefit of the policy holder enabling them the flexibility and control to finalise the reinstatement of the affected property and their manufacturing processes.

Buildings - The insured was able to invest their insurance settlement in not only rebuilding but re-designing the layout of their manufacturing facility to improve efficiency for longer term benefit.

Plant and Machinery - The insured’s innovative bespoke process plant was reinstated to current specification and standards on a new for old basis as per the policy coverage. The insured was able to review and improve on their operational efficiencies as part of the reinstatement process for the longer term benefit and improved profitability.

Stock - Extensive analysis was required in order to ascertain the true cost value of the stock given that the manufacturing process entailed low cost raw material supply and extensive resource input in the manufacturing process.

Business Interruption - Critically, the loss mitigation measures employed enabled the majority of customer orders to be processed during the indemnity period, albeit at a substantial incremental cost.  Detailed calculations and analysis were undertaken to ensure the optimum recovery was achieved under the policy given the presence of both increased costs of working and additional costs of working cover.

Detailed analysis and calculations were performed in light of the apparent significant growth trend in the business.  A forecast of the sales was built up throughout the 12 month indemnity period to ensure the optimum recovery was achieved under the policy.

BI Policy Extension - Denial of Access and Loss of Attraction

Business Interruption is a very complex area and we frequently come across incidents that are not adequately covered by the policyholder’s BI insurance. Quite often, however, they could have been.

Businesses can be severely interrupted by incidents that occur in their vicinity even where there is no damage whatsoever at the business itself. This situation is catered for in a business interruption policy by way of a policy extension. There are two such extensions – Denial of Access and Loss of Attraction.

Denial of Access

Denial of Access is designed to cover situations where it becomes physically impossible for customers or staff to get to a business location. For example a major flood may not damage a policyholder’s premises on the 11th floor of an office block, but it could render the building and surrounding areas inaccessible until the waters subside, access roads are back in action and the whole property is declared safe. A Denial of Access extension would provide cover for the business interruption loss that might occur.

So, Denial of Access is all pretty straightforward? Well no, because businesses frequently face situations where access is not actually prevented or denied or even hindered. For example, a shop owner operating in a shopping centre could suffer a significant drop in trade following a serious flood to the basement car park levels beneath the shopping centre. The situation could also be compounded by virtually no on street parking being available close to the shopping centre. As a result footfall to the shopping centre might drop by more than 50 per cent.

A Denial of Access extension would not have helped the policyholder in these circumstances because access was not denied.

Loss of Attraction

However, a Loss of Attraction extension would have enabled the shop owner to make a successful claim because this extension provides protection where potential customers visiting the premises are denied access because of lack of desirability or convenience.

Loss of Attraction cover also protects business for reasons less obvious than issues such as floods. For example, many shopping centres have “anchor” tenants. These types of tenants are considered a major draw and the main reason for customers visiting the centre. If the “anchor” store suffers a loss that forces it to shut, the resulting loss in footfall can harm all the other shops in the centre. In these sorts of circumstances a Loss of Attraction extension can be used to make a claim.

Our advice

Denial of Access and Loss of Attraction extensions to a business interruption policy can really make sense and we recommend that they are always included in discussions with clients when arranging their BI protection.

Snapshot of the Lord Jackson Reforms

In April the Jackson Review on civil litigation and the Ministry of Justice (MoJ) consultation on the civil justice reforms relating to low value personal injury claims came into force.

They represent the largest overhaul to the personal injuries legal framework in England and Wales in over a decade. Some of the main aims of the reforms are:

• Making lawyers costs proportionate 
• Combating the compensation culture 
• Creating an environment where claims costs savings will lower premiums

The changes that will be most apparent to consumers are:

After the Event legal expense premiums will no longer be recoverable: ATE was often the mechanism no-win no-fee solicitors used to enable them to offer such services. It was a way of underwriting their costs if litigation failed. As a result, no-win no-fee services may be offered far less.

Referral fees banned: This type of referral, where the referrer receives money will no longer be legal.

Among other changes are limits on the amount that can be claimed, particularly with regard to injuries such as whiplash.

How will these changes affect your clients?

Claimants will need to provide fast and accurate claims notifications, including:

• Notifying actual or potential claims immediately 
• Ensuring information provided is accurate and complete 
• Providing all relevant documentation within shorter timescales 
• Providing immediate assistance with liability investigation 
• Supporting quick decisions on liability 

Summary
The objective of these reforms is to make claims settlements faster and a much less painful experience. Even non-claimants should benefit in the longer term as reduced fraud and extraneous legal fees produce more competitive insurance premiums.

Commercial Claims Solutions appointed to DAS Claims Assist Adjuster Panel

Press Release              

Commercial Claims Solutions are pleased to announce their appointment to the panel of Loss Adjusters providing claims services for the DAS claims fees insurance product called DAS Loss Assist.

Commercial Claims Solutions is a leading supplier of claims services in the UK and worldwide with an excellent reputation for negotiating claims for policyholders.

Paul Lawrence, Managing Director at Commercial Claims Solutions commented:

“Claims fees insurance is a relatively new concept with excellent opportunities for growth and we are pleased to be partnering with DAS, a market leading company with an excellent reputation in the claims sector, to help them deliver a high quality service to brokers and their clients.”

Mark Rhoder, head of ATE & Special Risks at DAS Group commented:

“It’s just a fact of life that in today’s economic climate businesses need much more help with claims, especially on a technical level, to get back on their feet than ever used to be the case. For us to deliver on the promises made in the Loss Assist policy we have to make sure that the claims team we have around us have the highest levels of technical knowledge and experience. Commercial Claims Solutions has proven to us that they have and we are very pleased they have come on board.”

A little risk management goes a long way

We are heading for another bout of poor weather so we thought we’d pull together some tips for you to pass on to your clients to help them avoid unnecessary claims.

There is no doubt icy conditions produce more claims for slips and trips than at any other time of the year so if your clients operate from a premises they need to be vigilant to the potential risks to visitors (and employees) of being injured in icy conditions.

The Issue

Even relatively short bursts of poor weather and low temperatures can produce hazardous conditions underfoot that last for many days, and sometimes weeks after the initial event.

Most commercial buildings have some external areas that are used by employees, deliveries or the general public and building owners or tenants have an obligation under health and safety legislation to keep every pedestrian traffic route within the premises free from substances that may cause someone to slip, trip or fall.

The Solution

If a business operates from a premises they should have a plan to deal with the problem should it arise. Consideration should be given to the following when formulating your plan:

Resources
Businesses should know what manpower and equipment they are likely to have available should bad weather strike. Practically how many staff will be available (usually needed early morning) to clear areas and spread grit? Do they have sufficient equipment readily available on site, including sufficient grit and the means to transport it around the site?

Prioritise
Businesses need to decide which areas should be cleared for the premises to operate safely. Priority should be given to the building’s entrances, including goods and visitor entrances as well as staff entrances. It may be impractical to keep all car parks and areas clear so decide what needs to be done to ensure untreated areas are not used.

Maintain
Everyone in the business should be aware of their responsibilities within the plan. Make sure they have a plan to maintain the areas that have been cleared so that they do not re-freeze over.

Communicate
Employees should be informed of the bad weather plan in advance and be aware of the areas that will be prioritised for clearing so that they know what to expect when they arrive for work. Signs at the entrance to public areas should be used advising visitors of untreated areas. It should be made clear that they use untreated areas at their own risk.

Record
A premises specific risk assessment for operating the site in bad weather should be carried out and recorded.