What Happened?
On Wednesday 15th June 2015 at 2.30pm fire broke out in an adjoining unit, where a car recycling business was operating. The fire spread to the unit occupied by Konstruct, a screen-printing business who print clothing for sports teams, schools and companies.
The Damage
The fire caused damage to the roof and there was asbestos contamination. There was also water damage from fighting the Fire. The unit leased by Konstruct was damaged.
The business premises and machinery and inventories were contaminated by asbestos and the site was cordoned off until decontaminated.
How long was it before Konstruct was able to resume production?
It was 6 weeks before it was agreed Konstruct should relocate to new premises. Relocation and decontaminating machinery took 18 months.
What Insurance did this Manufacturer Have?
Konstruct was well insured and had both a Business Interruption Insurance policy and a Material Damage Policy.
What happened next?
Able Business claims was contracted to prepare the Business Interruption Claim for Konstruct.
Konstruct were completely unable to function, so a decision was taken to subcontract work to other suppliers.
The result
Subcontracting resulted in further problems due to poor print quality which further damaged the brand.
Able Business Claims prepared progress payments claims based on the difference between what was being earned and what would have been earned if there had not been a fire.
What Able Business Claims Did
Analysed the loss of profit and the increased cost of working
Prepared progress claims based on this calculation
Material Damage Claim
Able Business Clams also prepared the material damage claim by assessing Stock losses and costs of decontamination.
How Able Business Claims Maximised the Claim
Able Business Claims claimed a total loss situation
the business was unable to re-establish itself in new premises sufficiently quickly after the fire and had to rely on outsourcing which further damaged the brand because of poor print quality, spelling errors and late delivery.
Able Business put together progress claims
considering the reduced level of turnover caused by outsourcing work, ensuring that the client received payments that recognised the gap between where they would have been if the fire had not happened and where they currently were now the business was outsourcing its work.
Able Business Claims proved to the Loss Adjuster and Insurer that a recent increase in growth would have continued if the fire had not happened.
Calculating the loss of gross profit correctly was crucial to this claim as Konstruct had undertaken some very targeted Search Engine Optimisation in the 3 months prior to the fire and had significantly improved their rate of growth.
Indemnity Period
The indemnity period was fully claimed despite the insurer wishing to close off the claim as soon as Konstruct was up and running.
This often happens and it takes an experienced Claims Preparation expert to negotiate with the Loss Adjuster and Insurer to prove that although a business is up and running it is not yet back to where it would have been had the incident not happened.
Success!
Konstruct received higher progress payments than they would have done had they worked only with the Loss Adjustor.
All the cost of working with subcontractors was also claimed as Increased Costs of Working
The effects of the Targeted Search Engine Optimisation was taken into account.
When the decision was taken to re locate the business as subcontracting was causing further loss of business, Able Business Claims was able to show the Insurer that relocating saved the insurer 2 months of subcontractor costs.
In all, 3 progress claims and a final claim were made and the total claim was over $350,000.