Overview
For charities that provide essential services, unexpected property damage can have consequences far beyond the cost of repairs and can have a disastrous effect on the local community. Disruption to accommodation, cancelled bookings, lost income, donations withdrawn and the impact on service users can quickly turn a straightforward claim into a complex recovery process.
This was the situation faced by a charity that provides residential and recreational facilities for disabled and neurodiverse children and adults when a sudden water leak caused extensive damage to its premises.
The Impact of the water damage on the charity’s property and services
The charity owned a substantial building that played a central role in delivering residential and recreational experiences. However, when a toilet cistern failed on the second floor, water spread throughout the property, causing extensive damage.
The incident left nine bedrooms and two corridors unusable. The damage required significant remedial work, including:
- Specialist drying of the affected areas
- Replacement of ceilings and walls
- Electrical inspections and testing
- Replacement of damaged timber
- Full redecoration.
As a result, the charities residential bookings had to be cancelled, creating an immediate financial impact on the charity.
Fortunately, the charity did have adequate Buildings, Contents, and Business Interruption insurance cover in place.
Challenges in the claims process
Loss adjusters appointed by the insurer attended the property with the charity’s representatives and insurance broker. However, once the true extent of the damage became clear, responsibility for the claim was transferred to a different loss adjuster.
Recognising the complexity of the situation, the insurance broker requested assistance from CEC under our client’s Gold Service agreement.
The charity had already approached its trusted contractors, who were familiar with the building and their special needs, and had provided a quotation for the required repairs. However, the loss adjuster handling the claim challenged both the contractor selection and the schedule of damage, arguing that the extent of the repairs had been overstated and that alternative contractors should be used.
This disagreement threatened to delay the restoration programme and prolong the charity’s inability to use key areas of the building.
How CEC helped resolve the dispute
CEC became actively involved in supporting the charity throughout the claims process by working alongside a surveyor. Our adjuster reviewed the damage and helped resolve the disputes surrounding the scope of repairs. The team was able to demonstrate why the proposed remedial works were necessary and why the charity’s preferred contractors were the most appropriate choice to undertake them. With our support the charity also secured an interim payment, helping the charity maintain progress while the claim continued.
Despite these efforts, approval delays from the insurer’s loss adjuster resulted in approximately four months of lost time. This proved particularly damaging, as the delays meant the charity missed its peak summer booking period, resulting in additional lost income.
Maximising the Business Interruption Claim
While the physical reinstatement of the property was important, recovering the charity’s financial losses was equally critical.
CEC carried out a detailed assessment of the income lost from the unavailable residential rooms. Using previous years’ performance and confirmed bookings for the current year, an annual growth trend of 4% was applied to project the charity’s expected income had the incident not occurred.
An additional challenge arose when a donation linked to a special school holiday stay was withdrawn because the facility could no longer be used as intended. Initially, this loss was not considered recoverable under the claim. CEC successfully argued for its inclusion, ensuring the charity was compensated for the lost donation.
The claim also incorporated staff overtime costs incurred while dealing with the emergency and its aftermath. The resulting business interruption calculation was reviewed and approved by the insurer’s forensic accountants.
How CEC created a successful outcome
Following negotiations and detailed claim preparation, the case was successfully settled with a final claim payment totalling £162,488, covering both the property damage and the associated financial losses. Our claim service highlights include:
- Necessary repairs were agreed and completed
- Lost income was fully assessed and recovered
- A withdrawn donation was successfully included in the claim
- Staff overtime costs were recognised
- Interim funding helped support recovery
- The charity incurred no additional fee for CEC’s involvement, as the work carried out fell within the hours already included in the Gold Service agreement
- A positive result for the charity and the insurance broker helping to maintain their relationship.
A Gold Standard for a Fair Claim
The charity and its broker were both pleased with the outcome. More importantly, the charity was able to focus on restoring the critical services for the children and adults who rely on its facilities in the local community.
This case demonstrates that, even where appropriate insurance cover is in place, achieving a fair settlement can require expert advocacy, particularly when disputes arise over repair scopes, contractor selection, business interruption losses, and consequential financial impacts.
For organisations facing complex claims, specialist support with CEC can make the difference between a prolonged dispute and a successful recovery. For more information about how CEC can support your claims process, please email us at info@claimsec.co.uk or call 0141 781 4695.