Restoration – Tissue Manufacturing Plant and Equipment

Finch was retained by a Loss Adjuster on behalf of the insurer to determine the extent of damage of domestic and commercial tissue manufacturing plant and equipment in a factory in Birmingham.

This was the result of a flash flood that caused water ingress to the property from the ground and roof.

Finch made arrangements to attend site with the Loss Assessor and the Insured within the same week as the date of the instruction. The Insured advised that the machinery had been powered down as soon as the water started to enter the property. The machinery was reinstated and over the course of five months following the incident, major problems started occurring on critical machinery.

After assessing the machinery in detail, Finch deduced damage had occurred as a result of the flood and was directly due to the lack of correct decontamination process. However, it was identified that by utilising restoration and replacement of parts, much of the plant and equipment could be returned to a pre-loss condition.

To validate the costs of this step, Finch organised the appropriate restoration company, original equipment manufacturers and third party companies to provide quotations to verify if items should be replaced or restored. During this stage Finch decided that four items out of the 18 should be replaced whereas other items could be restored with a combination of restoration and replacement parts. A meeting was then held with the instructing Loss Adjuster, Loss Assessor and the Insured to discuss the findings and to devise a plan to settle the claim and to return the equipment to a pre-loss condition.

The Insured decided to take a cash settlement on this occasion. The claimed value of the loss was £4,000,000 and settled for around £700,000. This did not include the business interruption element of the total loss.