Actions Required By A Policyholder Following Property Damage

The following Case Study considers some of the actions required by a Policyholder following Property Damage.

The Policyholder has negotiated the spectators, the red and silver reflecting security tape. He stands in front of the charred remains of what was once a thriving business providing an income for both its owners and employees. Suits and ties have been replaced with overalls and gumboots as men rummage through the wreckage trying to identify the cause and salvage critical records. It’s like a war zone!

The days following the loss are often the most difficult but perhaps the most important.

It is critical that the owner of the business be given the information needed to make decisions regarding the future.

The owner needs to know how the insurance cover will respond. Whether it will place him in the position he would have been in if the fire had not occurred. He must understand his responsibility to minimise the loss.

Amongst the many onerous tasks following a loss the owner of the business needs to work through the insurance policy and: -

• Breakdown the material damage loss into workable components.
• Determine the Basis of Settlement for each category.
• Identify if replacement and reinstatement conditions apply.
• Determine what records need to be maintained.
• Consider any salvage value of damaged property.
• Establish a program for asset replacement.
• Engage contractors.
• Schedule regular meetings with loss adjusters, builders, contractors and claim preparers.
• Consider the impact of reinstatement procedures on the magnitude of the Business Interruption loss. Implement appropriate loss minimisation measures.
• Determine whether any underinsurance penalties apply.
• Identify and maintain the records necessary to substantiate the claim.

This is by no means a complete list of the tasks which need to be considered following a loss. Specialist assistance should be considered.

Author

Published with permission of Claim Solutions Pty Ltd.

Insurance Policy

Country: - Australia

Policy Description: - Various Industrial Special Risks (ISR) and Fire policies

Insurer: - Various

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