The Client and Its Challenge
A leading New York City law firm had contracted a retrofit of an existing 11-story structure downtown. Work was conducted from the top down, so that as each floor was completed, it could be laid out with office furniture and equipment. One week before employees were scheduled to relocate to the new premises, a pipe burst causing $1.2 million in damage to the building and its contents.

Though the law firm had a builders' risk policy, there were questions as to whether or not the contents, such as furniture and computers, as opposed to just the infrastructure, would be covered. Policies normally only cover fixed elements such as walls, floors, etc. The value of the movable assets was approximately $380,000.

The law firm was eager to recover all its losses, particularly as its insurance carrier had verbally indicated that contents would be covered, and it believed it had paid a premium for such coverage. However, upon review of the policy, the carrier insisted that only the building itself would be covered. Unfortunately, the law firm did not have a strong paper trail to support its claim.

The Risk Consulting Solution
Marsh’s Risk Consulting practice was engaged by the law firm to help it recover as much its loss as possible. The Claims Consulting team worked with the client, its contractor, and other suppliers to determine the exact value of the claim and to gather the necessary documentation to support it.

Once the extent of the claim had been established, the team engaged senior personnel within Marsh to undertake the negotiations with the carrier, so as to best use its experience and market leading position. This was vital as the carrier insisted that it would only cover damage to the building itself. Furthermore, the carrier was only willing to offer $250,000, though the damage to the building, excluding costs associated with the furniture and cubicles, was in the $800,000 range.

Month after month, these senior Marsh personnel met with the carrier, providing more and more detail related to the claim. As a result of these meetings, the carrier increased its offer, until a satisfactory conclusion was reached.

Results
By the end of the negotiations, the Marsh team succeeded in obtaining a full recovery — $1.2 million — for the client.