Unfortunately in Ireland every year a number of pubs, hotels and restaurants are destroyed by fire, and the business is closed over-night. With the trauma there is a loss of jobs and a daunting task of what to do next.
The only possibility of recovering from that situation, is if the business is adequately protected by a policy of insurance. However, all may not be as simple as it seems, even with a good policy of insurance in place.
Insurance companies appoint a firm of loss adjusters to investigate and handle matters on their behalf. They will require a forensic examination of the scene to be carried out. This is primarily to establish the exact cause of the fire, which can be helpful in establishing any possible recovery against any third party e.g. if there was a faulty electrical item installed or purchased in the recent past. The forensic examination and the Loss Adjuster’s interview and request for documentation, will also establish if policy warranties have been complied with or not. Many policies have warranties covering things like monitored alarm systems, certified cleaning of grease traps and extraction ducts, deep fat fryers, thermostat control warranties, removal of waste etc. A breach of a warranty that has led to the cause of a fire will result in a claim being declined.
Failure to comply with some of these warranties, even if they had no bearing on the cause of the fire, could be cause for declining a claim, if the warranty wordings are ‘precedent to liability’. i.e. if they are not complied with the policy could be declared null and void. The law reform commission in Ireland wants to establish legislative clarity in relation to the duty of disclosure, insurable interest and repudiation of claims. This can sometimes come into sharp focus when a serious loss occurs. In the UK Insurers are not entitled to decline a claim for breach of warranty where the breach is of no relevance to the circumstances of the loss.
It is impossible to have certainty that a policy of insurance will cover every loss that it is supposed to, and the absolute answer will only emerge after the event. However, if a loss occurs it is possible to seek professional advice and assistance in relation to the handling and processing of the insurance claim. It is advisable to engage a Loss Assessor who specialises in property damage and business interruption claims to ensure the full entitlement is obtained under the terms of the policy. Regulated Public Loss Assessors are not only able to assess the damage and compile a detailed statement of claim, they are also expert in the small print of policy wordings and market practice.
Jim Flannery, Director, Balcombes Claims Management, has a long and distinguished track record in the insurance business. He has worked in the General Insurance sector in Ireland since 1980 and has been a Director of Balcombes Claims Management since 2002. He also has a long association with the pub trade which has given him a unique insight in the hospitality sector. His father William Flannery owned Temple Bar in Dublin for almost 40 years. His uncles own the Flannery Pubs in Limerick, many of which are now being run by his cousins, as “second generation” establishments, including former Munster and Ireland hooker, Jerry Flannery, Catherine Street; Paul Flannery, Shannon Street; Philip Flannery, Denmark Street; Seamus & Liam Flannery, also Denmark Street; Pat Flannery, Cecil Street, and Seamus Flannery, Caherclonlish, Co. Limerick. There are also second cousins Ahearns who own The Palace Bar, Fleet Street, Dublin and Fitzgeralds who own Fitzgeralds in Sandycove.
On his mother’s side there is also publican blood. Jim’s maternal Grandfather Michael O’Dwyer, used to own the Greyhound Bar in Harold’s Cross. His uncle John O’Dwyer used to own The Oval Bar on Middle Abbey Street, and The Barge on the Grand Canal. Again, second cousins Conor & Tony O’Dwyer own the Stillorgan Orchard and and Billy O’Dwyer owns O’Dwyers, Kilmacud respectively. Both are second generation publicans and have a third and younger generation actively working in the business.
It is no great surprise therefore that Balcombes have established strong connections and links to Insurance Brokers who represent the pub trade when it comes to representing owners who suffer damage to their business. They have been involved in many high profile fire claims that have destroyed public houses.
The Merrion Inn went on fire when a wheelie bin in the premises next door was maliciously set alight. The flames spread up the gable wall of the pub and eventually caught hold in the roof timbers. The roof and upper floor of the premises was destroyed by the blaze and water and debris was washed down through the premises.
The Vevay Inn in Bray, likewise was destroyed in a blaze that started at 2am in the beer garden. It too took hold of the roof and spread throughout the premises destroying everything.
In the case of The Players Lounge in Fairview there was a hold-up at 2.30am on a bank holiday Monday and the entire takings were ordered from the safe. The culprits then set fire to the premises before making good their escape.
A similar malicious fire was started in The Racecourse Inn in Baldoyle and The Lisdoo in Dundalk where a lighted missile was seen on CCTV footage being thrown through a window. In each case extensive damage was done causing hundreds of thousands of Euros worth of damage to the property.
An important consideration for bar owners is their Business Interruption cover. It is vital to estimate an adequate sum insured to cover a potential loss of gross profit for the business looking two years ahead. This is because you could take out the policy today for 12 months and the fire could happen on the last day of insurance. The period of the loss of profit only starts then and runs usually for the following 12 months. It is worthwhile considering whether it is possible to re-build and re-establish the business within 12 months. Luckily for the McCormacks, the Merrion Inn had an 18 month indemnity period. Were it not so, the premises was not reinstated within 12 months and the owners would have been at a loss of profit for the additional period taken to get the business re-opened.
No matter how competent a publican is, when it comes to dealing with a loss adjuster acting for an insurance company, it is cost effective to engage a regulated insurance loss assessor to compile, submit and negotiate the best settlement possible.
Diarmuid McNulty handles the Business Interruption claims in Balcombes and is recognised in the Insurance industry as Ireland’s foremost business interruption expert acting on behalf of claimants. The advice and re-assurance that is available to those who have been unfortunate to suffer damage to their business is of immense value to a business owner. The whole thing can be very traumatic and is fraught with issues, questions and uncertainties.
The loss adjuster appointed by the insurance company is not there to assist in the preparation of the claim, or in advising on the way to go about it. They are representing the insurance company and are acting in the interest of the Insurer.
It is always better for a policyholder to have someone who is familiar with the process and knows what they are doing to handle the claim on their behalf. How can a policyholder know what they are entitled to? A great deal of time and effort can be saved, and a better outcome can be arrived at. To be able to discuss matters of importance to you with your trusted advisor is better than making costly mistakes.
Balcombes have also dealt with some of the biggest hotel fires in Ireland over the years. The Tuskar House Hotel in Rosslare was destroyed in 2002 and was never re-built. The owners were presented with a false but serious allegation of non-disclosure of a material fact in relation to the construction materials used in the premises. This resulted in the case being fought in the courts and an award being made to the owners in compensation.
Similarly, The Royal Hotel in Roscommon was destroyed over the Christmas/New Year period in 2007. Thankfully the amount agreed for the material damage allowed them to re-build, but the business interruption period was not long enough to cover the period required to reinstate. The Shannon Oaks Hotel in Portumna had a fire in the kitchen which took out much of the building. The loss adjusters were again focussed on non-compliance with policy warranties and looking at potential breaches to enable Insurers to get out of paying the claim. Unfortunately the bank decided to call in the loan and appointed a receiver to the business and this had an immediate effect on the insurance claim.
The important thing to realise is that for most business owners they will never have to deal with a serious fire or devastation of their business premises. However, by consulting the experts who have dealt with these types of events on a daily basis you can avoid the pit-falls and ensure expert opinion and advice to navigate the process successfully. Our role and motto is “Protecting the Policyholder’s Position”, and there is no better place to be, than to have a supporting role in the consumer’s corner.
Thankfully, for the McCormacs in The Merrion Inn, the business re-opened in November 2013 in time for the Christmas season as they welcomed back their loyal patrons and new ones and they look forward to 2014 and beyond with a new and improved establishment.
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