Taking the lead: effective response to a major commercial fire

May 2, 2024

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By Andrew Walsh, Major and Complex Loss Leader NSW & ACT and Executive Adjuster

This blog is the third installment in a series where our property experts highlight recent claims. In part three, we discuss a commercial fire. Stay tuned for the fourth and final blog focused on empathy and technology in claims, which is coming soon.

Claim details

A devastating fire engulfed a restaurant, resulting in the complete destruction of the building. Adjacent to the restaurant, a prominent pharmacy suffered extensive fire damage, along with pervasive smoke and soot. Sedgwick’s major and complex loss (MCL) adjusters were entrusted by the insurer to manage this complex claim. Two seasoned MCL adjusters led the response, leveraging their collaborative expertise gained from prior claims.

Understanding key issues

Due to council order and safety requirements, the insured couldn’t operate its business following the fire. Being that the incident occurred before the holiday season, securing builders and restorers became a significant challenge. Additionally, the building’s complex ownership structure required constant communication with the insurer’s adjuster.Most of the fit-out was also uneconomical to repair, as confirmed by the appointed restorer. It was clear that teamwork and strategic coordination between disciplines would be pivotal in the recovery process. 

Responding to the challenges

Leveraging their networks, the dedicated adjusters swiftly deployed an engineer, builder and restorer to address the council order and ensure site safety. At the same time, adjusters collaborated with the insured to understand their business needs and set up a self-contained dispensary to maintain prescription services. Sedgwick engaged forensic accounting services (FAS) for business interruption (BI) support while creating a comprehensive plan. To ensure progress tracking, regular meetings with the insured and the adjusting team took place. The MCL adjuster managed builders and restorers, while the FAS professional handled business information and stock assessment. The executive MCL adjuster provided continuous updates to all stakeholders.

Meaningful outcomes

Throughout this commercial fire claim, effective teamwork and strategic coordination between Sedgwick’s major and complex loss adjusters, forensic accounting services, and various contractors helped expedite the recovery process for the insured, including: 

  • Temporary setup — Swiftly completed within weeks, ensuring it met hygienic and safety standards.
  • Cost reviews and scope confirmations — Conducted for the builder’s and restorer’s work.
  • Stock information — Reviewed and settled within a month.
  • A detailed scope — Engaging a building consultant to review the fit-out.
  • Competitive tenders — Sedgwick and the consultant reviewed cost, methodology and timeframes.
  • Steps to minimise business interruption (BI) — The most competitively priced qualified contractor was selected and completed the work within the agreed timeframe.
  • Stock settlement — Allowed for timely restocking and reopening of the building in tandem with repairs.

Meticulous planning, swift action and close collaboration are three factors that helped deliver significant outcomes in the aftermath of this major commercial fire. As a result, affected businesses were able to resume operations within weeks as opposed to months. 

Stay tuned for the final blog in this series where our experts will highlight the role of technology and empathy in claims.  

Tags: Australia, building, commercial, Fire, Fire damage, Fire protection, Forensic, forensic accounting services, Loss, Major + complex loss, major and complex loss, MCL, Property, Property damage, Property loss, Restoring property