If there was ever a situation to highlight the fact that all insurance is not the same, it is the twin fates of a Parramatta café and the printery next door after a recent fire.
One Thursday after the café staff had gone home for the night, a fire broke out in the kitchen; the ensuing blaze caused extensive smoke damage to both businesses before the fire brigade was able to bring it under control.
Charles Batt, the owner of the MBE printing franchise, watched the blaze and resigned himself to losing out on two large printing jobs on which he had expected to start work on Monday morning.
After making a claim the day after the fire, however, his insurance policy swept into action, with decontamination and repair works taking place over the weekend. The effort allowed him to be back in business by first light on Monday, before the clean-up effort at the café had even got into full swing.
This is how it happened.
Adam Luscombe handled Batt’s claim and says while the fire was contained to the café, the business assets, stock and shop floor of the MBE shop was badly damaged by the soot and smoke caused by the fire.
“There was a big clean-up needed to get rid of the smell of smoke and to clean the premises and the machinery,” he says.
“Our client had a business package policy, with the fire and perils section of the policy responding to the claim, providing coverage for the loss of the business back to its pre-loss condition,” he says.
The insurance policy also included business interruption insurance, however this section of the policy didn’t need to fully respond as the business was back trading on Monday, meaning its profits were not greatly affected.
“We were able to get the assessors in on Friday as soon as it happened. But what made the real difference was that Charles was prepared to open the place over the weekend so the clean-up crew could do their job as quickly as possible. It meant he was open for business on the following Monday,” Luscombe says.
Although it took four weeks for the business to be completely back to its pre-fire state, the vital steps that needed to be taken so the firm could reopen were completed over the weekend.
“While our crew did everything they could over the weekend to ensure it was business as usual on the Monday for MBE, there was very little that happened over the weekend at the café to speed up the clean-up process for them,” he says.
Luscombe says that MBE’s insurance policy was with Acerta. “They are not a household name but we have a really great relationship with them, which is essential when you’re making a claim.”
He says one of the hallmarks of an exceptional claims experience is where there is little required from the broker to progress the claim to completion.
“The majority of a broker’s work should occur when the policy is set-up to ensure the policy will respond when it comes to claim time. MBE is a franchise business with the insurance placed as a group policy, but we can negotiate terms for franchisees on an individual basis if required, should they need something specifically covered.”
“The people who run the café had packed up and gone home for the day when the fire happened,” Charles Batt says. “Then we heard the fire alarm. Initially we didn’t think much of it, we certainly didn’t expect a major fire. But then we saw the smoke. Because the café was locked there was no access to it, which means we couldn’t try to extinguish the flames before the fire brigade arrived,” he adds.
He says from his perspective, it was lucky his shop, and the more than half-a-million dollars in printing equipment in it, were not damaged by the water used to put out the fire.
“After the fire there was smoke through everything,” says Batt, “the walls, ceiling tiles and everything in every drawer was coated with soot,” he says.
Batt says he was amazed at the specialist skills and equipment the clean-up crew used to return the business to its pre-fire condition over the weekend, adding it was fascinating to watch the professional crew use machinery such as scissor lifts in the clean-up process for his shop. “If I had done it myself, I would not have known that special cleaner needs to be used to clean the soot off walls so they can be repainted.
“If the cleaners organised by the insurers had not finished the job over the weekend it’s likely I would have been out of business for a week,” he says.
In contrast, the café embarked on its clean-up with little more than a team of kitchenhands.
“If I hadn’t had insurance I would have had to fund the clean-up myself and it’s likely I would have had a week without income. It’s highly likely I would not have had a business at the end of it,” Batt says.
Batt says the big lesson from the experience was how important it is to have a broker help navigate the universe of potential insurance policies.
“There’s a temptation to take the cheapest insurance,” he says.
“But it’s only when you make a claim that you realise there’s a real difference between what policies cover. Having someone to walk you tailor the cover for your business is invaluable.
“Because I had business continuity cover, it was in the interests of the insurer to get the clean-up done and get me back trading in the shortest time possible. This made all the difference to my business.”