When emergency measures are required to get business recovery fast-tracked following factory fire, the cost is going to be high.

by Cecilia Harris

It took just 15 minutes for an exhaust-vent fire to set an entire factory ablaze, threatening to ruin a decades-old Australian manufacturing business.

Paul Lyons, CEO of the Bolwell Corporation, received a call from his operations staff at 6.30am on a Thursday last year, informing him that their Melbourne truck-parts factory was on fire.

Once the safety of all staff members had been established, Lyons got straight on the phone to his broker. Robert O’Brian got what became a business-saving claim underway rapidly. It was made clear that if the company couldn’t recover fast, their clients would find another manufacturer.

Bolwell had a second plant in Seaford. The only issue was getting equipment and supplies delivered from Melbourne and Thailand quick enough to keep their clients supplied. The operation involved an instant need for freight and wage funding, which was covered under an ISR policy.

With staff working around the clock to re-establish the plant in Seaford, the business interruption and loss of property and materials coverage they had under their specialist policy proved to be the difference between survival and the end of a 50-year-old trademark.


“The area where they had the fire was in the laminating plant, which is the part that’s probably most susceptible to having a fire.

They turned the machinery on at 6am. At 6:15am they noticed smoke coming from the exhaust system and by 6:30am the place was pretty much ablaze. We are talking about fibreglass.

It is very volatile, high-hazard material. The fire brigade were there fairly quickly but there wasn’t a lot they could do. The place was totally destroyed.

On the way down there, I rang LMI, who specialise in large, industrial special-risks claims, and I spoke to Allan Manning, from LMI Group.

I told Allan that we needed him to get down there as soon as possible to assist in handling the claim. I knew it was going to be a big claim and I knew that we needed someone with a lot of expertise to get through the business interruption side of things.

We notified the insurance company and they had loss adjusters down there as well. They set up a video camera and recorded all the damage so that we had a full account of exactly what had happened and how it ended up.

There were a lot of sub-limits on the policy that came into play. Under business interruption, they had various sections covering wages for the increase in costs of workers. They had to have two or three shifts with workers doing a lot of over time to get the back-up plant operating.


The client had an alternate laminating plant down at Seaford. Moving their laminating to the other plant incurred a lot of extra cost. Under the material damage side of things, there was the loss to equipment and product caused by the fire. All of that was covered too.

They were able to, under extreme pressure, continue operating. They didn’t actually lose any turn over at all, but the business interruption costs were horrendous because they had to get back-up across from Thailand by air freight.

If they didn’t have cover they would have been out of business. There is absolutely no doubt about that.

A major part of the reason that this ended well was because they had the right cover. The second reason was the insurance company Allianz. They were absolutely brilliant. They came to the party with everything the client needed.”

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“I received a number of text messages and phone calls from our operation staff at the plant to say that we had a fire. I jumped straight in the car.

When I arrived, the fire fighters were looking at protecting the adjoining property. The decision had been made pretty early on that the fire was so intense they wouldn’t be able to save our building. So we stood and watched it burn.

The main thing was to make sure all of our employees were safe. That was the number one thing; I wasn’t interested in talking to the media; I just wanted to know if anyone had been injured. That was my first priority.

It was then about trying to understand what to do next. Our factory had burnt down and we were standing there looking at the ashes. My concern was about how to keep our key customers supplied, because we lost a lot of their dies and tooling, and a lot of their product.


We had another facility available to us, not far from the plant in (Melbourne suburb) Mordialloc, and we were able to establish that facility to continue supply to our customers. The fire happened on a Thursday and we were back supplying to our customers on Tuesday. It was an amazing effort by every member of staff. It was just fantastic to see. We worked all weekend.

There was obviously going to be a level of impact on our clients, but we got into planning and rescheduling straight away. We knew how to do that. What we didn’t know was how insurance claims work, and how to manage the aftermath.

Where our broker Robert O’Brian was absolutely key in all of this was putting us in touch with the experts in managing insurance claims. He got Allan Manning from LMI Group, and Bob Richards from Cunningham Lindsay and the whole group was just outstanding. They sat me down and told me to relax and walked me through the whole process.

The claim was very complex and very detailed but they helped us understand what the insured are expected to provide and we worked our way through all of that. We have now reached the stage where our building is almost 80% complete. It’s world class; everyone involved has done a fantastic job.”