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Tutwiler Helps Condo Developer Recover for Loss on Construction Delay Expense Claim

Tutwiler Helps Condo Developer Recover for Loss on Construction Delay Expense Claim
While the insured’s builders risk policy was in full force and effect, a covered loss was sustained when a fire occurred on the 39th floor of the 51 story insured property, causing severe water and smoke damage. As a result of the fire damage, repair and restoration costs were incurred and delays occurred in the completion of construction to the insured property.
 
A claim for the fire damage repairs to the building along with a complex claim demonstrating the delay cost in completion was submitted by the insured to the carrier. The carrier hired experts, and through their investigation made a decision that the repairs of the fire and water damage, which encompassed 44 floors of the building, would not have delayed the completion of the construction; thus denying payment to the insured under the additional coverage they purchased for this type of loss.
 
Based on a recommendation, Tutwiler & Associates was retained to assist the insured with the claim and get the matter resolved based on the actual facts of the loss and the coverage language in the policy coverage. Frank Fortson the lead public adjuster on the loss reviewed the policy endorsements for Construction Delay Expense and found where the carrier had insisted that the coverage was determined by the insured obtaining a Final Certificate of Occupancy. The policy stated that coverage was determined by the Commencement of Commercial Operations, which was not defined in the policy. Commercial Operations for a condo begins when the first Temporary Certificate of Occupancy is obtained allowing the insured to begin closing sales of units.
 
Many challenging issues were involved in this claim investigation including applying the policy to the facts of the loss. For example: we had to account for all of the increased expenses allowed under the policy and reach an agreement on a daily dollar rate of the loss. Then, an expert assisted us in determining the actual number of days of actual delay using among other things the critical path that had been established to keep the construction on time. This was a complex calculation utilizing the construction scheduler files, notes from the daily manpower reports, shrinkage, and many other issues related to the additional fire damage repairs. These factors were analyzed, documented and then presented to the insurance adjuster for the carrier and the legends of experts hired by the insurance company.
 
In the end, after numerous negotiations and meetings with the carrier, its experts and their lawyers, Tutwiler & Associates assisted in resolving the delay in construction claim cost and loss to our client's satisfaction.
Public Adjuster: Frank Fortson
Posted in: Condominium, Condominium Association Property Insurance Claims
Claim Types: Fire Damage, Frank Fortson

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