Case Study Archive: Claim Types: Business owner

testing

Flooded bakery in Kendal: £100,000 insurance claim for machinery, stock and business interruption

Ginger Bakers is a very successful specialist cake producer based in Kendal, Cumbria, supplying commercial outlets across the country. When Storm Desmond wreaked havoc across the north of England in December 2015, the bakery’s leased premises were hit by floods both from a nearby beck and rising up through the floor. Eventually four feet of water came into the premises, destroying all the machines and stock and making it unfit for use.

Lisa Smith, who owns Ginger Bakers, realised she faced a very difficult time keeping the business going as well as making an insurance claim. So, based on personal recommendation, she asked Morgan Clark to handle the claim on her behalf.

The claim

The first action was to move the business into suitable temporary premises to enable production to re-start, which was particularly important because of Christmas commitments. With unprecedented demands for temporary accommodation, she was only able to find smaller premises and a separate garage for storage, which had an impact on the volume of business possible.

At the same time, Morgan Clark started to progress the insurance claim, which comprised £35,000 plant and machinery, £5,000 stock and £60,000 business interruption, including compensation for the smaller, more restrictive premises.

Discussing aspects of the claim with Morgan Clark gave Lisa an opportunity to step back and reflect on her business and led to her making a big decision: to move into far larger premises once the claim was settled. She therefore asked Morgan Clark to expedite the claim as quickly as possible so that she could start this new phase of her business – and this they achieved. “Morgan Clark helped me enormously in this. They talked through the new premises from an insurance perspective and without them I wouldn’t have had the courage to make the decision.”

The results

Lisa is now moving into new, larger premises and expanding her business. She realises however that without Morgan Clark the outcome wouldn’t have been the same: “Our house was flooded at the same time and we haven’t used a loss assessor to handle this claim – and it’s been awful. It really showed us the difference a loss assessor can make.

“I honestly think that if I’d been dealing with the bakery claim by myself I would have thrown in the towel. Morgan Clark made all the difference: they made it smoother and easier, and helped me realise things I was entitled to claim for which I would have ignored by myself. I’ve no doubt it’s because of Morgan Clark that we’re in the fantastic position we’re in today.”

Flooding at kitchen worktop manufacturer: £1.2 million claim

Stoneworld is a very successful manufacturer of quartz and granite kitchen worktops, importing expensive materials from across the world and using sophisticated precision cutting machinery. Based in Kendal, Cumbria, it distributes its high-end products through outlets across the country.

In December 2015, its two buildings were flooded with almost four feet of water, completely destroying the machinery and writing off most of its stock. According to Shama Collins from Stoneworld, “when it happened we were overwhelmed. December is a peak time as we have to meet Christmas orders, but we came to a complete standstill. We realised we faced an enormous insurance claim. But we don’t know how the insurance world works and it just would have been too much to do it ourselves on top of what we already had on our plate. So we turned to Morgan Clark.”

The claim

Morgan Clark recognised that the most important thing was to restart manufacturing as quickly as possible. However to do this the company needed to replace the expensive precision machinery which had been ruined by the flood. Cash flow was also critical. Even though there were elements of under-insurance, Morgan Clark immediately negotiated a substantial allowance for the damaged stock. The company could then pay for replacement machinery and stock, despite premium prices caused by the critical timescales, and manufacturing resumed.

The results

Stoneworld overcame the tremendous challenges it faced and started trading again very quickly. At the same time, Morgan Clark successfully negotiated a total insurance claim of £1.2 million, comprising £550,000 plant and machinery, £250,000 stock and £400,000 business interruption. The BI claim covered not only loss of gross profit but also increased cost of working which included the significant amounts of overtime staff had to work to fulfil the order book.

According to Shama, “Throughout this whole terrible episode, if there was one decision we got right it was using Morgan Clark. They understood from day one where we were coming from: they appreciated our commitments to clients and the losses we would incur if we didn’t move quickly. They realised the importance of getting back on our feet rapidly, otherwise not only would we lose customers but also it would cause huge damage to our company’s reputation.

“Morgan Clark saved our company. It would have taken us so much longer to get on our feet without them and we would never have achieved the same results. I would advise anyone facing an insurance claim to get a loss assessor because they really know what they are doing – and as far as insurance is concerned, we don’t.”

Flooding – £630,000 business interruption claim

In 2007, the town of Doncaster was hit by two floods in very quick succession. A large trading estate was very badly affected, including a successful steel processing and stockholding company. Three of its industrial units on the estate were contaminated by flood water and most of its stock damaged. This had a significant impact on its trading operations.

The claim

The company turned to Morgan Clark’s team of commercial loss assessors to manage its claim for business interruption. Morgan Clark’s business interruption specialists worked with them to ensure they received their full entitlement: in short, what was needed to re-start trading and to secure the future of the business.

In particular, Morgan Clark and the company’s management worked together to draw up imaginative plan which did not mirror operations prior to the disaster. This would not only enable a quicker resumption of trade but would also rationalise the company’s operations.

The results

With the help of Morgan Clark, the company successfully claimed £630,000 under the terms of its business interruption policy, covering:

The cost of rationalising its warehousing structure. Rather than re-instate and move back into the three existing warehouses, the company moved all its operations into one warehouse on another site.
Compensation for the theoretical period it would have taken to re-instate the existing warehouses and move back in.

A very favourable settlement for loss of turnover: despite an increase in turnover in the immediate aftermath of the incident, Morgan Clark successfully argued that this growth would have been even greater without the flood.

No matter what has caused the damage to your home, Morgan Clark will guide you through the insurance claim process and ensure you are back in your home as quickly as possible while ensuring you receive the full settlement you’re entitled to. Contact our Doncaster Loss Assessors today to find out more.

Flooding to historic pub – £500,000 claim including business interruption

After a prolonged period of torrential rainfall, vast areas of Worcestershire were hit by major flooding. A large public house near Great Malvern was completely engulfed: water swept through the picturesque beer garden and poured into the ground floor and cellar. The owners, who lived upstairs, had to jump out of windows and swim across the road to reach safety.

The pub was a listed building, with ancient exposed timbers and brickwork. The owners quickly realised the enormity of what they faced: not simply the re-instatement of their historic property but also the survival of their business. The most pressing worry was that, if the pub couldn’t trade, they would have no income at all. They decided they needed specialist help at this difficult and stressful time and so turned to Morgan Clark.

The claim

Morgan Clark’s team of specialist commercial loss assessors took over everything:

They urgently negotiated with the insurer for emergency funding for the publicans to support them while they were not trading.
They brought in a specialist restoration company who carried out the enormous and complicated task of stripping, decontaminating and drying the substantial property.
They introduced a specialist firm of chartered surveyors to prepare a detailed specification for re-instating the listed building.
They compiled an extensive business interruption claim based on projected turnover during the indemnity period.
They compiled the rest of the claim, comprising buildings (£300,000) and contents/stock (£100,000).

The results

The insurer covered the entire claim which totalled £500,000:

The owners were able to survive financially while the pub was not trading.
The full business interruption claim for the indemnity period totalling £110,000 was met.
The claim was paid in its entirety, covering the building, outbuildings, gardens, stock and contents.
The pub was fully restored to its original specification by specialist contractors, in accordance with listed building regulations. It is now back fully trading.

Flooded industrial unit – £290,000 material damage and BI claim

Cellular Mouldings, based in Kettering, Northants, is a specialist manufacturer of moulded products. In June 2007, a nearby brook burst its banks after torrential rain, and the factory suffered a sudden and devastating flash flood. Over two feet of water swept through the building and then disappeared almost as quickly as it arrived, leaving behind a trail of debris and sewage.

The factory was completely wrecked: as well as ruined plasterwork, doors and furniture, six out of the seven very expensive specialist moulding machines had been submerged and were beyond repair.

Managing Director David Matthews tried in vain to get a speedy response from his insurers but just could not get them to inspect the damage: “I realised that it was essential to have someone working on my behalf to get things moving, otherwise it would have been a major distraction from what I had to do to save the business.” He therefore turned to Morgan Clark to handle his claim.

The claim

Once Morgan Clark was on board, the insurer started to respond and cooperate. The priority was to keep Cellular Mouldings trading and to restore production as quickly as possible. Morgan Clark immediately submitted an interim claim to maintain cash flow. Then, working with Morgan Clark, Mr Matthews located temporary machines and sub-contracted some of the work, while production staff worked overtime to fulfil orders.

Morgan Clark then compiled and presented comprehensive buildings, tenant’s fixtures and fittings, contents and business interruption claims.

The results

Morgan Clark successfully negotiated a claim for £220,000 for material damage. More importantly, it successfully negotiated a business interruption claim of £90,000 for loss of turnover based on the growth the company would have achieved if the flood had not happened, rather than on the previous year’s performance.

By leaving the insurance negotiations to Morgan Clark, Mr Matthews was able to focus on re-establishing his business. Existing customers’ orders were fulfilled through careful distributed production and sub-contracting. At the same time new machines were located quickly and started to be installed a month after the disaster. As a result, Cellular Mouldings survived and has gone from strength to strength.

Residential college fire – £1.5m buildings and contents claim

When an electrical fault caused a major fire at the UWC Atlantic College in South Wales, one of the school’s boarding houses was almost completely destroyed. The College’s immediate priority was to re-house the 52 students who lived there, so it decided it needed professional help not only to make what was inevitably going to be a substantial insurance claim but also to manage the re-building project.

According to Nicholas Marten, Business Manager at the College, “We did some research into loss assessors and, after meeting them, we chose Morgan Clark. We were impressed by their speed of response, what they said they would do and how they would deal with our claim.”

The claim

Once they had been appointed to handle the claim and to manage the re-building project, Morgan Clark immediately appointed a specialist company to carry out emergency safety and protection works to the damaged boarding house. They also arranged for the construction of a temporary pre-fabricated accommodation block for the students.

Hiring this alternative accommodation was very expensive for the insurer as well as disruptive to the students’ lives. The College therefore was under pressure to complete the re-building of the original block as quickly as possible. This was a significant project which included replacing the roof, external cladding, mechanical and electrical services, plasterwork, sanitary ware, fixtures and fittings, as well as complete redecoration.

Morgan Clark arranged for specialist contractors, under the supervision of chartered surveyors, to reinstate the property within a very tight contract programme. At the same time, it prepared, presented and negotiated settlement of the substantial and complicated building and contents claim.

The results

Morgan Clark agreed a final settlement with the insurers of just over £1.5 million, covering the re-building of the accommodation block, temporary accommodation for the students and all contents lost or damaged. More importantly, however, through careful management and close liaison with the surveyors and contractors, it ensured that the reinstatement work was completed ahead of schedule, saving significantly on the cost to the insurer and disruption to the students.

According to Nicholas Marten, “Morgan Clark kept us fully informed at every stage, and they took away the headache of organising repairs as well as making the claim itself. We were busy with the aftermath of the fire, and particularly with re-housing our students, so it was great that we could just leave them to it. It meant that we could be much more effective in our response to what was a major incident.”