News & Insights

Bushfire disruption cost calculation critical to claim payout

Published 08 December 2021

When the 2019/20 bushfires caused disruption to a tourism operator’s properties in New South Wales and Victoria due to enforced road closures, the owner initially decided to prepare their insurance claim for the resulting business losses by themselves. 

But the contingent business interruption component of an insurance claim can be tricky to navigate and it’s not always advisable to take a DIY approach. In this case the owner’s submission raised questions for the insurer about how the terms of the policy applied to the situation, and how the sum put forward for perceived losses during the impacted period had been calculated.

 


 

Claim background

The insurer’s claims assessors contacted Gallagher in our capacity as the owner’s broker, and our team that deals with complex claims conducted an in-depth investigation into the scope of the owner’s insurance and its application to his claimed losses. 

On examination the team discovered that the client’s initial claim submission had been made on terms that applied to only part of the policy. In fact his cover included provisions that provided a broader basis for making a claim for the owner’s contingent losses.

Using the methodology specified by the insurer for evaluating the cost of the disruption to the owner’s business, the team rebuilt the submission, tailoring it around the appropriate policy wording. 

By doing this we were able to more than double the value of the payout. Sometimes it pays to leave it to the experts!
 

Resolution

Our complex claims team’s expertise in preparing and negotiating submissions for business interruption losses was key to the favourable outcome achieved here. 

Equally important was our positive relationship with insurers’ claim assessors which enabled negotiation and allowed us to resubmit the claim under relevant terms of the policy for a much greater payout.
 

We pride ourselves on our claims service

Part of our commitment to building business confidence is fighting for what’s right, and supporting clients through claims is one of our key pillars of business practice.

Gallagher claims expertise and 17 case studies are outlined in the Gallagher Advocacy in Action report where you can read more about this oil production claim in detail and other examples from professional indemnity to corporate travel. 


Download the report Claims Advocacy in Action: 17 Real Life Case Studies now.
 

Further reading

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Gallagher provides insurance, risk management and benefits consulting services for clients in response to both known and unknown risk exposures. When providing analysis and recommendations regarding potential insurance coverage, potential claims and/or operational strategy in response to national emergencies (including health crises), we do so from an insurance and/or risk management perspective.
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