Beanstalk Advisory

Background

During early 2017 I got a call from a Property Owner advising that his commercial building had suffered a significant fire.  Our business had been recommended to him and could I meet him on site.

At the subsequent meeting he gave me copies of letters his company had received from the Perth City Council from October 2016 through to February 2017 setting out their requirement for the decontamination and removal of asbestos contaminated debris from the fire affected site.

The debris was largely concentrated in and around a number of uninsured, luxury cars privately owned by the Insured and housed at the insured address (the Situation).

Something of a stand off had arisen whereby the Insurer had instructed the client to remove the uninsured cars at his own expense to enable reinstatement works to the Insured building to proceed

The stand off had been exacerbated a little as the last letter from the Council advised that should the Health (Asbestos) Regulations requirements set out in their earlier Notice not be complied with within a matter of days they or their Contractors would enter the property, undertake the significant and costly compliance works required and seek to recover those substantial expenses from the property owner! Actual excerpt here.

Outcome

We (very quickly 🙂 ) wrote to the Insurer, advising that in our view they were overlooking a critical distinction.  Whilst the vehicles may well have been uninsured the Council hadn’t discussed the vehicles themselves directly – it was the asbestos contaminated debris they wanted removed. That is, asbestos roof cladding that prior to the fire comprised roof sheeting but friable strands following the fire.  The same insured building componentry – but in different composition.

We advised that if the roof sheeting was still in its original more recognisable composition insurers would presumably have had no hesitation in accepting the costs of removing the roof sheeting debris from the site – as costs associated with removal of debris from the Situation.

The insurer initially maintained there position – see excerpt. There was back and forth over the next few days where we advised that it was not only technically incorrect but inequitable to insist upon the client picking up the costs of removing Insured (Building) debris.  Even if the client was ultimately responsible to bear the cost of  shifting the uninsured vehicles that would have represented no or minimal cost but for the fire and the asbestos contamination. The Insurers position of effectively “you have to move the cars as they are not insured” and/or “you are moving them anyway” did not address the full set of circumstances and technical policy obligation. The Insurer was obligated to remove the Building debris contamination from the Situation (upon which  the vehicles sat) to enable the client to comply with the Notice.

Initial pricing enquiries revealed that it was likely going to be more costly to decontaminate and certify the uninsured cars as asbestos free on site than to undertake cleaning and removal simultaneously. After back and forth discussion over a several day period, with the Council ‘threat’ lingering in the background, common sense prevailed and it was agreed the Insurer would make a contribution of 95% of the face value of the original removal quote.