Avoiding a business-ending loss: The power of proactive claims support

We know just how important proactive support on claims are. That's why, when our claims experts were presented with this particular scenario, they managed to provide a positive outcome for our customer. As well at this, they ensured the worst didn't happen.

The incident

When a major fire broke out at our insured customer's premises, the impact was immediate and severe. The blaze caused extensive damage to five curtain‑side trailers. These contained customer goods, as well as third‑party stock stored within the warehouse. 

The scale of the destruction left several customers facing significant losses. It also placed our insured in an extremely vulnerable financial position.

Swift action to support affected customers

Following prompt on-site investigations, we worked quickly to assess and validate the losses presented. We settled claims from multiple customers totalling over £150,000. This utilised the full extent of our insured customer's available limitation of liability.

After these settlements were made, there remained a small amount in our customer's overall Policy Limit. If any more claims were to come through, this could threaten our customer's business viability.

A late claim threatening business viability

At a late stage, solicitors acting for the last remaining customer submitted a further large claim of more than £450,000. They also argued that our insured customer’s standard trading terms—which usually limit liability—had not been properly agreed. If our customer had been able to show that these terms applied, the claim would have been covered by the remaining amount available under the policy.

Without this protection, however, our insured was left facing an uninsured claim of over £420,000. After already struggling through the Covid‑19 pandemic and dealing with tough market and regulatory conditions, a loss of this size could have forced the business to close altogether.

Going above and beyond to achieve a fair resolution

Although the only option was to tender the Policy Limit and leave the customer to pursue any additional loss directly, we recognised the value of a different approach. We stepped in to support our insured customer and opened proactive discussions with the claimant’s solicitors.

We were clearly able to outline the limited funds available and emphasise the practical benefits of reaching a realistic solution. Our claims team encouraged all parties to adopt a pragmatic mindset.

A positive outcome for all parties

After constructive dialogue, the third‑party solicitors agreed to accept a settlement. This was equivalent to the outstanding balance of our customer's Policy Limit.

This outcome:

1. Fully resolved the final outstanding claim
2. Protected our customer from a financially ruinous uninsured loss
3. Ensured their business could continue operating and remain viable

Strengthening future resilience

As part of our ongoing support to our customers, we've liaised with our insured customer. With our guidance, they are reviewing all contractual processes to ensure their terms and conditions are properly communicated and incorporated in the future. This should help to reduce the likelihood of similar issues arising again.