What happens when a loss event occurs in the middle of another claim?

The above does not occur often, but it does sometimes.  Indeed, we have been involved in claims in which whilst the damaged machine was being transported to a workshop to be repaired, the lorry carrying it had an accident and overturned, thereby an increase of the loss being brought about in such cases.

On other occasions, due to an error on the part of a subcontractor who had been engaged in the repair of the damage, when it came to testing the machine, it failed and the repair and recommissioning of the same was delayed by several weeks.

In cases like these we have come across some Insurers who regard these incidents as being part of the same claim, since they understand that they occurred during the process of repairing the damage caused by the first loss event.  Whilst respecting this interpretation, the indemnity is paid by the Insurers and it is they who decide how the loss is to be adjusted.  It is the opinion of VANTEVO CLAIMS ADVISORS, that in both cases these are different loss events, since they occur at different times, on account of different causes and brought about by different persons.

In the case of the accident during the transportation, there will be somebody responsible for the same whose Insurer must be liable for the damage caused to the lorry’s cargo.  Therefore it is essential whenever a machine is to be transported so as to be repaired at an external workshop, that insurance is contracted that covers this carriage, since normally the covers of the carriers is inadequate.

In the other case, we have here an error on the part of an external subcontractor who must have a Professional Liability Policy, which should be liable for the loss and damage caused by the poor performance of the company subcontracted for the repair of the damaged machine or installation.

Unfortunately,  cases such as the above are not usually considered in the General Conditions and Schedules of the Policies, when it stands to reason that the Policies ought to specify whether they should be regarded as being new claims, as we at  VANTEVO CLAIMS ADVISORS believe, or as incidents of one and the same loss event.

Common sense tells us that the experts ought to consult the Insurers as to the what approach to take in these types of cases, since what tends to happen is that all the loss and damage is covered under the Policy whilst at the same time they try to recover the increased loss and damage from the third parties that were responsible for the same.

Why should Insureds contract a risk survey?

As the saying goes “better safe than sorry”, yet all too frequently we have encountered, on the occasion of visits motivated by claims, companies whose layouts and risk prevention and safety measures left much to be desired.

In a tough insurance market such as the current one, it is important to invest in prevention and safety so as to facilitate the acceptance of the risks by the Insurance Companies.  Many of the measures that can be undertaken, such as improving cleanliness, sealing of electric cable ducts, thermal imaging of the electric switchboards, charging forklift batteries in an adequate place (either open air or well ventilated) … are cheap to do and require little investment.

In addition, it has been proven that most of the loss events that occur in industrial risks are caused by human factors, i.e., due to the negligence of their own workers or workmen from external companies engaged in maintenance or repair work.  Therefore, it is vital to ensure that the operations and maintenance manuals are complied with and likewise the protocols for the “hot work permits”, and that both your own as well as the subcontractor staff know and follow the prevention and safety manuals established for each risk.

There is no point whatsoever in having excellent prevention and safety rules, if then their rigorous compliance is not enforced or controlled.  Being strict on this point would substantially reduce the claims record of companies, and is a matter in which their boards of directors and works committees ought to be seriously involved.

The fact that some experts inspect the risks and issue reports recommending improvements in prevention and safety issues and point out any deficiencies and gaps found, we believe would reduce the accident rate of companies and facilitate the cover of their risks by Insurers.

At VANTEVO CLAIMS ADVISORS, we have experts in risk surveys and are in a position to assist Policyholders and Brokers to reduce their claims record and lower the cost of their insurance policies.