Total Loss by Fire — Manufacturing Plant
A fire destroyed an aging manufacturing plant operated by a global packaging manufacturer. The company ultimately chose not to rebuild on site, a decision that reshaped the claim.
The resulting damages were an $80M+ property damage, stock, business interruption and extra expense claim, substantiated and settled in less than twelve months.
- Industry
- Global packaging manufacturing
- Peril
- Fire
- Coverage
- Property damage, business interruption, extra expense, unplanned capital expenditures
- Result
- $80M+ claim settled in less than 12 months
The Loss
The fire started in a furnace and spread quickly through the plant, bringing down part of the roof and causing a structural collapse at the center of the building. The fire burned approximately three-quarters of the facility, and once it was extinguished the site was deemed a total loss. Production stopped immediately, and clean-up and loss mitigation began right away.
The Process
Onsite within days of the loss, we worked with the insured and the adjustment team to take physical inventory, set claim protocols, assign point people and launch the request for information process. Interim submissions supported reserves and advance payments. Because the plant was not rebuilt in place, the insured elected the capital expenditures clause, requiring proof of more than $60 million in unplanned capital spend.
The Results
The claim settled within twelve months at approximately 95% of the amount claimed, including recovery of replacement cost based on qualifying capital expenditure spend rather than the actual cash value of a decades-old plant. Early substantiation supported an advance payment of approximately $25 million within a month of the loss.