Tolly Farm is a Pet Crematorium.
What Happened?
On 25th January 2019 one of 2 cremation units suffered an explosion. This was probably due to a build-up of vapour from the fats and oils that are released during cremation. Two separate investigations had failed to conclude the exact cause.
The Damage
One of the cremation units was extensively damaged by the explosion to the extent that it was unusable, but was capable of being repaired. This did not stop the loss adjuster suggesting that the whole MD and BI claim together could be settled for an amount that was less than 10% of the final settlement.
Initially it was not clear whether the repairs were economic or if the unit would need to be replaced by a new unit.
How long was it before Tolly Farm was back to full working capacity?
It took 2 years to repair the Crematorium and get Tolly Farm back to where they were before the fire.
What Insurance did Tolly Farm have?
They had both Material Damage and Business Interruption Insurance but their cover was limited.
What happened next?
Engineers were bought in to examine the cremator and provide costings.
As the remaining Cremator was still able to operate the business was maintained by working longer hours. An extra shift was introduced at night-time and additional staff were taken on to work the night shift. An extra vehicle and staff were also needed to do the collections in a shorter time.
Some work was outsourced to other crematoriums. All these actions which kept the business functioning were Increased Costs of working which could be claimed as part of the BI claim.
How Able Business Claims Helped
Able Business Claims prepared the Business Interruption claim and the Material Damage claims for Tolly Farm.
Able Business prepared a detailed analysis of the staffing costs to ensure that all Increased costs of Working were claimed.
Able Business helped the client decide between repairing or replacement of the cremator.
It was decided to repair the cremator and Able Business helped manage this process by monitoring the timeline and ensuring all invoices for work undertaken to repair the cremator were claimed.
As a result of working the second cremator for longer hours there were additional repair costs to the second cremator. Able Business was able to ensure these were included in the BI claim. The cost of the repairs to the second cremator were claimed as increased cost of working under the BI claim as they were due to working the second cremator more intensely in order to keep the business going.
Able Business argued that running the second cremator at night avoided outsourcing work and that this would have cost the insurer significantly more than the cost of the repairs.
Success!
The result
When the explosion first happened, the client was offered a prompt settlement of $40,000 to simply replace the damaged cremator. The claim ran for the full indemnity period because of Able Business Claims involvement and the final payment was in excess of $500,000 + GST.
The client now has two working cremators and a working business.