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Case study: Lorega Adjuster reduces business interruption claim for gastropub.

Case study: Lorega Adjuster reduces business interruption claim for gastropub.

Case Study: Licensed Trade

Material Damage and Business Interruption claim

When a major fire broke out in a traditional gastropub, located in London’s West End, it suffered serious damage to its structure and the roof.

Luckily the pub, which dated back to the 1880s, was unaffected by the fire itself, but there was significant damage done by the fire service’s extinguishment water, which entered the pub and restaurant on the ground floor, as well as the kitchen in the basement.

This resulted in the ceiling collapsing and extensive damage to the flooring and the kitchen equipment, including the cookers and extraction system which suffered major damage. The result of this extensive damage meant that the pub was unable to trade, so the owners immediately contacted their insurance broker to find out what could be done under their insurance policy.

As they had Loss Recovery Insurance, Lorega was able to send a Chartered Loss Adjuster to visit the site within 24 hours and instigate drying measures, reviewing the extent of the damage and deciding on a strategy for moving forward. Unfortunately, this was not a straightforward claim and problems arose with regards to the separate buildings insurance arranged by the landlord, who seemed reluctant to instigate works to the flats and roof.  This resulted in subsequent rainwater penetrating the pub, meaning further damage. It transpired that the landlord of the building was submitting a planning application to change the roof and add more flats above the pub, which would result in considerable delays.

Beer Tap Lorega case studyThe Lorega adjuster was able to communicate with the insurers, who ultimately agreed to fund the emergency works needed including a “tin hat” over the building. Although this was not strictly covered under the policy, our adjuster argued that this would reduce the business interruption claim, which would outweigh the cost of the emergency works. This resolved the initial issues with rainwater and allowed proper drying to proceed, meaning agreements could be reached over the internal refurbishment of the pub.

The Lorega adjuster worked side by side with the client to maintain detailed records of any costs incurred and to prepare a full business interruption claim for presentation to the insurer’s loss adjusters. This was a complicated process as many of the staff had been redeployed to other pubs owned by the policyholder, but after considerable negotiation our adjuster was able to agree a sensible mechanism for calculating the loss of profits claim.

The pub reopened, but trade was still affected as works to the flats and roof were ongoing and there was scaffolding across the frontage. Our adjuster obtained agreement to put up temporary signage alongside some initial promotions, and a claim was agreed within the maximum indemnity period.

The pub is now continuing to trade successfully having re-established itself in the local market; both the broker and the policyholder were delighted with the service they received from Lorega.

Customer feedback

“From the start, Lorega offered me total reassurance"

"Thank you, you were a great help and made sure I claimed for everything I was entitled to. Could not have done it without you”

“Your support and input was excellent”

New survey shows insurer’s claims service still lags behind SME customer expectations.

New survey shows insurer’s claims service still lags behind SME customer expectations.

According to a our recent independent survey of SME insurance customers, there remains a clear gap between the experiences and expectations of SMEs in the UK* when it comes to making a commercial insurance claim.

Despite the growing appetite and interest in SME insurance products and distribution opportunities, our survey found the experiences of those making claims were still lacking.

A snapshot of the numbers:

  • Nearly 70% of SMEs say interim and final claims amounts not agreed promptly
  • 6 out 10 SMEs received no advice on loss mitigation as part of the claims process
  • Only 16% of businesses had a loss adjuster visit with 24 hours of reporting a claim
  • Close to 60% of SMEs had no regular communication from their insurer on claim progress
  • Over half of SMEs got no explanation of claims responsibilities

 

For SMEs who had made a claim of over £5,000 in the last two years, their experiences revealed insurers still have some way to go to address the concerns highlighted in the Financial Conduct Authority’s thematic review on SME claims published in 2015.

 

When asked about the support received, only half of the SMEs (56%) said they had received advice and support in preparing the claim. 57% of respondents said they did not have regular communication from their insurer on the progress of their claim.

 

53% said they were given no explanation of who was responsible for their claim and the same percentage said they were provided with no information on their cover and claim coverage. When it came to claim settlement, nearly 70% indicated their insurance company or its loss adjuster did not agree interim and final claims amounts promptly.

 

When asked to what extent their insurance company and its loss adjuster understood the impact of the loss on the business, over half of SMEs said they only understood somewhat or partially. Just under 6% said they did not understand at all.

 

The results of those who made a claim contrasted with what many SMEs expected their insurer to provide.

 

SMEs surveyed who had not made a claim, had clear views on the most important aspects they would expect to receive as part of the claims service. At the top of the list was for their insurer to provide regular communication on the claim’s progress. This was closely followed by advice and support in preparing a claim and prompt agreement of interim and final claims settlements.

 

Expectations around receiving information on cover and which sections might be relevant for the type of claim being made and guidance from their insurer on how to mitigate the impact of the loss on their business also featured highly amongst SMEs.

 

Commenting on the survey results, Neill Johnstone, managing director of Lorega, said:

 

While the development and distribution of insurance products for SMEs continues to evolve, our survey indicates there remain challenges in the servicing and support available when SMEs call on the policy in the event of a claim.

“The foundation of our business model was to provide policyholders with access to claims expertise; enhancing the service they received when it came to making and settling claims. The results of our survey reveal that this approach is more relevant and necessary than ever before.

“The survey reflects a number of findings from the FCA’s thematic review on the handling of insurance claims for SMEs which was published over two years go. It’s clear that the industry needs to take a more holistic approach to supporting SMEs who suffer claims of £5,000 and over, developing covers that include a responsive claims services with access to professional support and expertise, to ensure the trading and financial impact on SMEs is kept to a minimum.”

* Lorega’s research was conducted by Censuswide, with 250 SME business owners between 19.04.2017 – 24.04.2017. Censuswide abide by and employ members of the Market Research Society which is based on the ESOMAR principles.

 

 

How can we help?

When you are running a business, in the event that you need to make insurance claims following a loss, you need to have the confidence it is going to be sorted quickly.

Loss Recovery Insurance – For Businesses is an insurance policy which provides the policyholder with unlimited advice from one of our expert loss adjusters, to help you prepare, negotiate and settle a material damage or business interruption claim.

Acting independently of your insurance company, to help you achieve the fairest and fastest settlement possible under your insurance cover. We have a nationwide network of expert loss adjusters who respond promptly on notification and will visit you within the first 24 hours.

We have more than 25 years of experience in helping policyholders with their insurance claims, giving you peace of mind when you need it most.