The importance in fire claims of involving companies for the recovery and decontamination of machinery and plant

In fire claims, some assets are destroyed and, inevitably, must be replaced.  Others, on the other hand, only sustain partial damage and can be recovered.  Indeed, what tends to happen in serious incidents is that the fire directly affects some areas of the risk whilst other parts of the plant only undergo damage due to smoke, heat, the water sprayed by the Fire Brigade or by the risk’s own automatic extinguishing systems, or the corrosive gases that are formed such as HCI (Hydrochloric Acid), etc.

In these cases where the damage is only partial, it is both expedient and cost-effective to involve companies specialising in cleaning, drying, decontamination and recovery of the equipment, whether mechanical, electrical or electronic.  These companies, some of which fortunately we have in Spain, for example BMS Technologies, Debeer- Belfor, Recover, etc., must intervene as soon as possible since the corrosion and oxidation processes worsen day by day. Therefore, the chances of success are far higher with an early intervention in the loss event.

Apart from minimising the Material Damage in the case of partial damage, the Consequential Losses can also often be reduced by the intervention of these firms.  In fact on some occasions damaged machinery can be temporarily repaired and can then continue to operate for a few months until new replacements are obtained, thereby minimising the Loss of Profits.

In most cases both the Insurance Company as well as the Insured are very satisfied with the involvement of these companies since they can resolve what could have posed a major problem for them, such as being unable to produce over several months until the replacement machinery arrives, which in the case of complex machinery could take some 12 or 18 months.

Moreover, at VANTEVO CLAIMS ADVISORS, besides using these companies in certain loss events, we also involve companies that are specialists in salvaging partially damaged stocks, since they perform a task based upon the classifying and cleaning of the partly affected stocks that can be highly cost-effective for Insurers.

Why it is important to learn the cause of a loss event

Learning the source or root cause of a loss event is, along with the appraisal of the loss and damage, the most important task of a loss adjuster in the event of a claim.

There are 3 reasons why it is essential to learn the exact origin of the loss event:

  1. So as to ascertain the cover for the same. For example, in the case of a Machinery Breakdown brought about by slow and gradual corrosion, the claim would not be covered.
  2. So as to recover the indemnity from a third party, if we can demonstrate their liability in the cause of the same.
  3. Because if we know exactly what has occurred, we can take steps so as to prevent the same thing from happening again and bringing about a similar loss event in the future.

In complicated claims, such as a major fire, it is advisable to involve investigators and experts in the examination of its root cause. Fortunately, there are an ever increasing number of firms and teams specialising in this work for ascertaining the exact source of a fire.  It is important to confirm that it has had an accidental origin and that we are not dealing with a loss event that was caused deliberately.

Likewise in the case of Machinery Breakdown, it is vital to involve metallurgical laboratories so that, based on the analysis of the part that initially broke, it can be determined whether it was a sudden and accidental breakage or was the consequence of a slow and gradual process.  As we have stated earlier, in this second case the claim would not be covered.

Although, ideally, official laboratories or ones belonging to Schools of Engineering should be used, these bodies have the problem that they tend to take several months to provide the results of the analyses and often this is not acceptable, since the Insured and the Insurers want to know as soon as possible whether or not the claim is covered by the policy.  That is why we at VANTEVO CLAIMS ADVISORS usually use private laboratories and investigators of recognised professional competence since they are able to be more agile in furnishing the outcome of their investigations.