Picking up good vibrations

BIA09 The Major Loss Award winner Cunningham Lindsey

Mairi MacDonald recounts how Cunningham Lindsey took charge and turned a potentially disastrous loss for 13 Rochdale homeowners into a well-managed and co-ordinated single claim.

When 13 houses in one street in Rochdale began crumbling at the same time, it could have led to a myriad of claims and a chaotic outcome. However, the winner of this category stepped up to bring all the parties together and find the best solution for everyone.

The British Insurance Awards' judges were extremely impressed by the level of co-ordination, organisation and leadership that Cunningham Lindsey applied to reach an outcome that satisfied residents as well as insurers under extremely difficult circumstances.

The saga began in March 2006 when a specialist from Cunningham Lindsey's subsidence team was sent to investigate a claim after the company received a call from a resident in Holborn Street in the town.

This was followed by claim after claim from neighbours. All the while, construction work was carried out at an adjacent building site and, by August, a terrace of 13 properties was crumbling. Cunningham Lindsey acknowledged that there was a serious problem, despite the developer refusing to accept responsibility.

Devastating impact

While some properties could be repaired, others had to be demolished. Some residents had unlimited cover but others needed to find up to £80 000 of their own money for repairs. Several residents had to sell their properties for a fraction of their undamaged market value.

Insurers had problems too. In one case, they faced a reinstatement liability of £120 000 on a house that was worth only £80 000, and there was the possibility that they would have to pay more later if the ground had continued to move.

Cunningham Lindsey recognised the complexity of the problem early. Appointed as the loss adjuster for six of the 13 houses, it decided to take charge and treat the individual claims as a single major loss.

First, Cunningham Lindsey ensured that residents and their properties were safe. The ground beneath Holborn Street was still moving at this point, leaving several buildings in a critical state, so it asked the local authority to close a lane at the rear of the site and arranged alternative accommodation for residents from 12 of the properties, while at the same time conducting investigations into the cause of the problem.

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When vandals targeted the empty properties, Cunningham Lindsey organised security for the whole site. It appointed a single consulting engineer, a recovery agent and three independent surveyors to value each property separately.

To ensure that none of the stakeholders was left in the dark as the process developed, Cunningham Lindsey also became the single communication channel, arranging meetings between loss adjusters, engineers, recovery solicitors and the local authority, as well as providing residents with regular updates through newsletters.

Leading up to settlement, the loss adjuster outlined three settlement options: a co-ordinated cash settlement; a co-ordinated repair schedule; and a co-ordinated sale of all the properties to a third party to deliver a diminution in market value settlement.

It was decided that the best outcome for all would be selling all the properties to a third party and, when the developers potentially responsible for the damage declined the purchase, Cunningham Lindsey found another developer to buy all the properties.

While customers with unlimited cover walked away with the undamaged value of their property, even those with as little as 50% value at risk received the full sum insured. Insurers too settled the claims economically and with no continuing liability.

The judges acknowledge that by taking the reins and thinking laterally, Cunningham Lindsey turned a lot of tricky small losses into one major one and achieved the right settlement for customers in impressive timescales. The legal case rumbles on. WinningWords

 

Following his firm's success at the Royal Albert Hall, Geoff Ball, director of project managed services at Cunningham Lindsey, said: "We are delighted that the excellent work of our specialist subsidence team has been recognised with this prestigious award, especially as the circumstances of the subsidence claim we faced at Holborn Street were testing. The outcome and our recognition at the British Insurance Awards are testament to the skill, experience, commitment and care of our team, plus the support that we enjoy from our clients, not just on this case but across the UK."

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