What Happened?
Good fortune Coffee Company had a fire on the 1st of February 2023. The fire started in the ceiling above the coffee roasting machine. Both the roof and the coffee roasting machine were damaged by the fire as well as by smoke and water.
The Damage
The roasting machine is in a room which opens off the Good Fortune Café. It is visible to patrons and is a part of the experience of dining in the Good Fortune Café. This meant that not only was the coffee roaster and ceiling above it damaged, but the café was affected by the smoke and once repairs began, it was affected by the noise and disruption of the rebuild.
How long was the business interrupted?
The damage to the roaster meant the business could not roast its own beans until the Roaster was repaired or replaced.
Good Fortune Coffee have a reputation for producing high quality coffee. They use beans that are grown organically, and the suppliers must meet Fair Trade standards. A temporary arrangement was made to use another companies’ roaster and repairs on the building and damaged roaster were begun immediately.
The business also has an online presence so was able to continue supplying its customers both online and instore, but the business was not able to function at the same level as before the fire due to the distractions caused by the repairs and the need to outsource the roasting.
The café continued to trade but at a lower level due to the smell of smoke and the noise of the building repairs.
The building repairs were completed within a month and the roaster was temporarily repaired and able to get back to work by April but turnover in all areas of the business did not show the expected recovery.
How Able Business Claims Helped
Able Business Claims became involved immediately after the fire happened. We were employed to prepare the Business Interruption claim but quickly also became involved in the Material Damage claim and the replacement of the Coffee Roaster.
1.Replacing the Roaster
The Problem
The client felt that the loss adjuster did not understand how badly damaged the roaster was. The insurer wanted to limit the claim to the cost of repairing the roof and the roaster.
What We Did
We undertook a review of the damage and prepared a claim based on the understanding that the existing machine could only be repaired temporarily. We referred to the opinions of experts who confirmed that it would never be reliable and could only be nursed along for the next few months. Both its capacity and performance were affected.
The Result
After submitting the claim in March, the insurer finally agreed to the replacement of the Coffee Roaster and made a settlement payment in August 2023. The negotiations required to reach this settlement were long and complicated with many detailed questions about coffee roasters asked and answered. We were able to get up to speed on this machinery and reach a settlement for the Coffee Roaster of over $170,000 where initially the insurer believed the $15,000 worth of repairs was all that was required.
2.The Business Interruption Claim
At the same time, we prepared a series of BI Claims over the 18 months indemnity period of the claim.
The Problem
At the start the insurer said there was no claim as the business had not been shut down at any time. This was a very simplistic view of the situation.
What We Did
We looked closely at turnover. We were able to see that the business had been affected and our reports showed this.
The Result
In December 2023 a progress payment of nearly $75,000 was paid. In May 2024 after further negotiations we were able to show that all streams of the business had been affected including the café. A further $40,000 was paid.
During this time, we learned that the business had been about to launch coffee and organic ice cream to supermarkets at the time of the fire. We showed the insurer the design and order of packaging specific to supermarkets. We calculated the losses caused by not being able to launch to supermarkets due to the unreliability of the damaged roaster.
The new roaster arrived and was installed in April 2024. Good Fortune began its delayed launch to supermarkets, but the market had changed and after further negotiations the insurer has settled the claim with an additional payment to reflect the agreed losses caused by the delay of this launch.
Success!
The Final Result
The client was able to buy a new Roaster and follow through with the launch into supermarkets because they received a fair Material Damage Settlement and a Business Interruption Settlement that fairly compensated them for the losses caused by the fire. In total Good Fortune received over $500,000 in Material Damage and Business Interruption payments.