Claim in a civil engineering work

Insurance Engineering

Claim in a civil engineering work
The importance of formulating the indemnity request

1. Foreword

For obvious reasons of discretion, the protagonists in the following case will not be identified, although the events described correspond to the development of the process.

It will naturally be for the reader to make his/her assessment and value judgement and to agree, or disagree, with the subtitle of this article.

2. The occurrence(s)

Along a section of a major road there were various landslides and movements of large volumes of earth.

At four different points on a six kilometer length section these occurrences naturally caused various losses and damages both to the work and to third parties.

3. First phase of the process

The Insured reported a loss to the Insurer, completed a claim form and delivered it.

After the expert inspection had been carried out, the Insurer acknowledged the existence of damages eligible for indemnity in the amount of EUR 80,000, of which EUR 75,000 were subject to a deductible, and therefore offered to settle the claim by paying a net indemnity of EUR 5,000.

4. Second phase of the process – What followed

Not satisfied with this situation, the Insured requested the intervention of MDS in order to lead the process so that they should be indemnified for the losses incurred, which had been insured through a policyunderwritten by MDS.

Having analysed the matter, MDS suggested that an "Indemnity Request” be drawn up, duly founded from a technical point of view, in order thereby to quantify the real losses incurred and to request the payment of the consequent amount of indemnity under the terms of the underwritten policy.

This was in fact done, in the form of an analytical and duly founded description of the following:
• the antecedents that led to the signing of the Insurance Contract;
• the nature of the contract job and all its characteristics with relevance to the matter in question;
• the occurrence(s) and what were deemed to be its/their cause(s) and respective operational mechanism;
• the repair solution(s) for the designated "natural reconstitution” of the insured asset, followed by the assessment of the resulting damages, respective liabilities, framework in the policy and culminating in the request for the net indemnity payable.

This "Indemnity Request” was delivered to the Insurer, after of course having been submitted to the scrutiny of the expert inspectors designated by the Insurer.

In view of the technical complexity of the matter in question, various meetings took place between MDS and the inspectors in order to try to find a consensual means of settling the claim according to the terms of the policy.

As a result of the work, dedication, thoroughness and professionalism of all those involved – MDS, the inspectors, the Insured and the Insurer – it was possible to conclude the process by obtaining for the Insured a net indemnity of EUR 675,000, enabling it to reduce significantly the loss it had incurred.

5. Corollary

The existence of an insurance policy, though well structured, does not guarantee that the Insured will be compensated for losses incurred due to an accident covered by the policy.

This case demonstrates that only after the affair had been thoroughly and competently handled by experts and professionals qualified to deal with matters of this nature was it possible for the Insured to receive an indemnity which, from the original EUR 5,000, was established through consensus at EUR 675,000. It thus seems appropriate to reiterate what we said at the beginning of this article, namely that "it will naturally be for the reader... to make his/her value judgement and to agree, or disagree, ...” with the subtitle of this article.

By Francisco Constantino, Civil  Engineer, Consultant Engifocus

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