traversing the obstacles presented in complex claims- lessons learnt

Traversing the obstacles presented in complex claims- Lessons learnt

Presented by Nish ChandraLKA Group

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WHAT MAKES A CLAIM COMPLEX?

National Conference & Exhibition 2014

WHAT MAKES A CLAIM COMPLEX?Large loss, leased commercial propertyContaminated siteMulti-unit sites with various insurers involvedHeritage listed buildingsMultiple buildings damaged with different usagesVarious considerations to identify including contract law,

common law and local lawsPressure to mitigate long-term costsPotential mould issuesLiability/ recovery considerationsEt cetera…..

Nish Chandra - LKA Group


HOW DO WE IDENTIFY IF A CLAIM IS COMPLEX?



CASE STUDY - MOULD


Tenanted property


CASE STUDY - MOULD


Owners Corporation claimQuote from agent’s handyman

$3,410.00 for patching walls and painting.

Quote for floors $7,387.00New tenant has signed lease so

repairs are URGENT


CASE STUDY - MOULD


Our inspection identified efflorescence on the external brickwork including seepage

We noted MDF skirting board damage in the rooms surrounding the laundry

We suggested EXPERTS in restoration become involved

We were under pressure from the Broker and also the Insurer to settle the matter quickly


CASE STUDY - MOULD


Mould found inside kitchen cabinetry

Mould found under floorboardsHigh levels of airborne spores

and surface mould identifiedKitchen had to be guttedExtensive amounts of

plasterboard was removedEntire floor removedEntire unit was remediated

according to IICRC standards


CASE STUDY - MOULD


Currently the damages are being scoped ready for quoting

Our estimate on repairs is $30-$38KMould remediation has cost over $8k Initial estimate (at first glance) was

just over $10k, now we are looking at just under $50k

HOW IS THIS JUSTIFIED???

Authorising initial quotes would have masked the issue

Looks good now, claim closed… but what is happening under the floor and in wall cavities?

Tenants – Pregnant lady, young children, elderly parents, immune suppressed, respiratory issues…

Cross-contamination of un-insured contents items

WHAT COULD OCCUR IN 1-3 YEARS FROM NOW?

Tenant is suing agent/owner for health, the rest of the lease term and for total loss of their contents

Owner joins his insurer who should have identified and remediated correctly in the first place

Insurer joins the loss adjuster and all trades who were involved in making recommendations costing hundreds of thousands of dollars not to mention court proceedings.


CASE STUDY – MOULD, LESSONS LEARNT…


Regardless of external pressures, don’t make rush judgements Use appropriate experts in their field; a good starting point would be to utilise the

services of a good Loss Adjuster to coordinate, decipher and bring together experts and expert reports for the insurer to make an informed decision

Don’t ‘jump the gun’…… mould, mildew exclusion exists in most policies…… understand the intention before making decisions/recommendations

With water damage any action needs to be swift, if considerable time has already passed mitigation needs to also be swift but most importantly by a suitably qualified (IICRC) expert

Settling claims is not all about saving initial cost, an insurer and all involved would rather save future litigation and additional costs which would in majority of cases be more than the initial proper cost

Just like nurses do, consider litigation risk in all settings and cover yourself appropriately


CASE STUDY – REMOVAL OF DEBRIS



BEWARE THE ‘CLAYTONS’ ASSESSOR


Not qualified to make indemnity recommendations as they often have no idea of the policy wording, nor expertise to interpret the policy

Often have a conflict of interest They are not impartial or independent They have surfaced in the industry under the cloak of builders, restorers,

repairers.

Their decisions may be unsustainable at FOS or litigation Their recommendations may prejudice potential recovery There is no one auditing their decisions/recommendations which could,

if left unchecked, cost the insurer far more in the long-term in claim leakages

They are a high risk to the integrity of a claim if not the insurer as a whole


CASE STUDY – HERITAGE LISTED BUILDING



LESSONS LEARNED/ SOLUTIONS


A claim may not present as complex from the beginning, ask appropriate questions Always be weary of recommendations to go the ‘quick and easy’ way out, this may pose

issues down the track Insist that the insurer engages a fully qualified loss adjuster, preferably one who is a

member of a professional organisation like AICLA (Australasian Institute of Chartered Loss Adjusters)

A loss adjuster will act impartially and thus instil confidence in the process this will also be beneficial for recovery/liability purposes

Always have potential litigation in the back of your mind

JUST BECAUSE A CLAIM COMES ACROSS YOUR DESK WITH QUOTES ATTACHED AND IS RELATIVELY MINOR IN COST; THIS DOES NOT MEAN IT IS NOT A COMPLEX CLAIM……

Thank you.

NATIONAL CONFERENCE & EXHIBITION 2014Platinum Sponsor

Silver Sponsor

Bronze SponsorRisk Manager of the Year

Award Sponsor

Conference and Exhibition Partners

traversing the obstacles presented in complex claims- lessons learnt

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