No matter how much we prepare for the ‘what ifs’, we’re always shocked and saddened for our customers when the worst-case scenario happens. And we’ll do our very best to help make a difficult time just that little bit easier.
So when one of our customers experienced a fire that completely destroyed their building, we were all too willing to roll our sleeves up and help.
Our client owns a large two-storey hotel in the West Midlands. The hotel is owned and managed by separate businesses but operates as part of a well-known brand. This means a variety of stakeholders were involved in the process.
Romero Insurance Brokers has worked with the brand for a long time, working closely with the company’s chosen insurer to make sure the customer has been correctly insured over the years.
In the first week of August, a fire broke out at the hotel. The fire was initially started by a t-shirt left on a sauna, but soon spread throughout the entire building. Though more than 50 firefighters and 10 fire engines tried to tackle the blaze, the building was unfortunately almost completely destroyed.
Luckily, thanks to the quick thinking of staff members and firefighters, everyone was evacuated and no one was injured.
The fire happened late on a Friday afternoon. By the Monday all key stakeholders including members of the Romero team had gathered to discuss the incident. The Romero claims team worked tirelessly throughout the weekend to appoint loss adjusters, communicate with both the customer and insurer, and to understand as much about the case as possible.
The claims process
In less than a week the insurer had accepted the claim and was prepared to begin proceedings. They were happy that the fire was an accident and our customer’s risk management strategy was sound. Furthermore, they were prepared to award an initial £1million sum to enable the hotel to employ a demolition contractor and structural engineer to begin examination of the site and its foundations.
There was a slight issue with the bank and a concern our customer would not receive immediate access to the money they needed to begin rebuilding the business. However, our expert team developed a strong professional relationship with the bank – acting as an effective middle man and ensuring the money was transferred successfully.
We also become the main contact for guest claims. The Hoteliers Proprietors’ Act means the hotel was liable for £100 per person for the loss and damage of guest property. However, with some guests claiming they had lost over £16,000 worth of property, we needed a new solution.
We soon discovered only a small handful of guests had their own travel and contents insurance, and £100 per person just wasn’t going to be enough. The brand owner, one of the key stakeholders of the case and a multinational corporation, stepped in to help. They agreed to pay any guest claim under £1,000, and more expensive claims if there was additional evidence.
Having worked closely with both guests and the companies involved, the Romero claims team were then able to close the case and leave the brand owner to deal with the claims directly.
The hotel made around £600,000 in gross profit each year. Its insurance policy covered the business for £20mil Building and Contents insurance and £10mil Business Interruption insurance. With the rebuild estimated to take over 18 months to complete, it became an increasing likelihood that the full £30mil of cover would need to be paid out.
On the advice of loss adjusters and contractors, we proposed a cash settlement. Both the insurer and the customer were happy to accept this, despite the overall sum being slightly less than it would have been if they had gone ahead with a full rebuild.
For both parties, a cash settlement made practical sense. To rebuild a multi-million-pound hotel would have been a lengthy and potentially stressful process, which might have taken years to make a profit again. With alternative accommodation already arranged for guests and employees offered roles in nearby hotels where possible, the impact of accepting a cash settlement rather than a rebuild was minimal.
With the case reaching a close, both the insurer and customer were happy with the result. Thanks to the Romero team’s dedication to the case and personal customer service, we were able to reach a satisfactory conclusion within just three months.