Overview
A global hosiery business specialising in tights and stockings, generating approximately £3.7 million in annual retail and online sales, experienced a sudden and unexpected disruption when a neighbouring party accidentally cut through its electrical power supply.
The outage lasted from 08:30am to 18:30 bringing the company’s operations to a standstill for a full working day. During this time, website orders could not be processed, telephone systems were unavailable and 18 members of staff were sent home as they were unable to carry out their roles.
The Challenge
Following the incident, the client estimated its loss at £14,231, calculated by dividing annual turnover across 260 working days. While this provided a straightforward figure, the insurer’s loss adjuster rejected the approach, explaining that the claim needed to be supported and presented in line with the specific terms of the policy.
Although the policy included cover for loss of profit, with a limit of £25,000 for power interruption, the situation was more complex than initially expected. The policy did not respond to loss of production or downtime alone. Instead, it required clear evidence that income had been permanently lost rather than simply delayed.
The insurer requested detailed financial information, including annual accounts and daily sales data and questioned whether customers had simply completed their purchases once the power was restored. This created uncertainty for the client, who faced the risk of a significantly reduced settlement without specialist support.
CEC Gold Service in Action
Having invested in CEC’s Gold Service at renewal, the client’s insurance broker introduced CEC to assist with the claim.
CEC’s adjuster worked closely with the client to clarify how the policy responded and what was required to present a successful claim. This included explaining the distinction between lost sales and deferred transactions, and also helping the client understand how to evidence the financial impact in a way that aligned with insurer expectations.
Using the data provided, CEC carried out a detailed analysis of the business’s trading performance. This involved assessing daily sales patterns, calculating the rate of gross profit, and applying an annual growth trend of 14.45% to ensure the figures accurately reflected the company’s ongoing performance. This allowed the loss of turnover attributable to the outage to be calculated on a sound and defensible basis.
The insurer’s loss adjuster initially proposed a settlement of £3,605. CEC challenged this assessment through a structured negotiation process, ensuring that the methodology used fully reflected the business’s trading pattern and the evidence available.
A fair settlement was agreed
Following negotiation, the claim was ultimately agreed at £3,988. While this was lower than the client’s original estimate, it represented a fair and policy-compliant settlement based on properly evidenced loss.
Both the client and broker were very satisfied with the outcome, not only because of the final settlement achieved but also due to the clarity and confidence provided throughout the process. Importantly, the support required to achieve this result used less than half of the available hours under the Gold Service.
Reflecting on the case story
This case highlights how quickly a straightforward incident can develop into a complex insurance claim. Without expert guidance, there is a real risk of claims being misinterpreted, unsupported, or undervalued.
CEC’s Gold Service ensured that the client was supported at every stage, from understanding policy coverage through to final negotiation. By combining technical expertise with practical, hands-on support, CEC helped transform uncertainty into a clear and successful outcome, reinforcing the value of having the right level of protection in place before a loss occurs.
For more information about how CEC can support your claims process, please email us at info@claimsec.co.uk or call 0141 781 4695.