Type of claim:
Fire broke out at a child care centre on a rural campus, occurring in the early hours of 1 November 2015 – the first day of the new protection period. Although the cause of the fire was never conclusively determined, it is believed to have started in an electrical switchboard. The building was extensively damaged. Thankfully, it was unoccupied at the time and no injuries were sustained.
With Unimutual’s agreement, the building was demolished and the debris removed shortly after the fire. We ascertained that the concrete slab was not damaged and would be able to be used for a replacement building, so this was left in place. From an early stage, the University indicated that it was unsure if it wanted the building to be replaced. Although the child care centre was on its campus, it was actually run by an external organisation with no money changing hands between the two organisations. As such, there was no Business Interruption claim and there was little interest in rebuilding the centre from the University’s perspective.
We engaged a quantity surveyor to calculate the cost to replace the building, including any improvements required by current building codes. This was an alternative to having a builder travel to the site in order to provide a quotation, in circumstances where there was considerable doubt that the work would proceed.
Once we received the quantity surveyor’s report, we offered the full amount (excluding the amount allowed for contingencies) to the University in settlement of this component of the claim. The University was delighted with the offer and accepted it.
The Unimutual difference:
In circumstances where an insured does not carry out repairs, or rebuild a destroyed building, an insurer would normally make a substantial deduction from a cash settlement sum. However, Unimutual does not do this and is usually prepared to cash settle at full value.