Introduction
When a commercial property is destroyed by fire, the first assumption is that the insurance claim will simply follow. Yet some of the most complicated insurance disputes begin after the fire has already been established.
The insurer may accept that a fire occurred but dispute its cause, the value of damaged property, the quantity of stock or the extent of consequential losses.
The Real Dispute Is Often Valuation
A business may claim loss of machinery, inventory, furniture, documents and other assets. The insurer may appoint a surveyor to assess the damage and determine the admissible amount.
Differences between the policyholder's claimed loss and the insurer's assessment can therefore become substantial.
Business Interruption
For businesses, physical damage may be only part of the loss. A fire may interrupt operations and cause loss of profits or additional expenses.
Whether such consequential losses are covered depends upon the policy and applicable extensions. The underlying business records may become as important as photographs of the damaged premises.
Key Takeaways
• Fire insurance disputes can involve causation, valuation and proof of loss.
• Survey reports can become important evidence.
• Stock records and financial documents should be preserved.
• Business interruption coverage must be specifically examined.
• Policyholders should understand the difference between the claimed loss and the admissible insured loss.
Conclusion
A fire may destroy property in hours, but determining the legally recoverable loss can take much longer. Good documentation and careful assessment of the policy are therefore essential to resolving fire insurance disputes.
