Property

The typical set up of an illegal cannabis farm can lead to significant damage within a property. This paper explores the insurance aspect, including examples of how policies might respond.

Deon Webber, a forensic investigator, explains the common hazards associated with cannabis farms and how police involvement might impact the insurance investigation process. Paul Redington of Zurich and Toby Knight of McLarens provide the insurer and loss adjuster perspectives, highlighting potential coverage issues such as unoccupancy and tenant vetting procedures and the different perils that can operate, for example, fire, escape of water and malicious damage.

• Cannabis Farms – A Growing Problem – Paul Redington, Toby Knight & Deon Webber(1.19 MB)
• A webinar on the same topic can be viewed here

The purpose of this paper is to share case studies of two escape of oil claims and to draw out lessons learnt for the benefit of CILA members.

Decisions around emergency works, mitigation measures and methods of remediation are discussed, along with policy cover considerations. The writers also explore the potential for third party claims, the case of Rylands v Fletcher, environmental protection legislation and interaction with the Environment Agency.

• Escape of Oil – James Parsons and Paul Redington (1.96 MB)

This paper considers whether and when building regulations apply when reinstating a damaged property as part of an insurance claim. See also the associated CILA paper “The Public Authorities Clause”.

The writer highlights key aspects of the Building Regulations 2010 which loss adjusters may want to familiarise themselves with, including the definition of what is meant by the term “building work”, thermal elements and controlled services. The wording of insurance policies is considered along with the practicalities of resolving such issues and working with Building Control Officers.

• When do Building Regulations apply? – John Carey (560 KB)

This paper outlines the Party Wall Act, highlighting aspects and scenarios that may be of particular relevance to loss adjusters in the handling of insurance claims.

TThe paper includes definitions of the terms within the Act (e.g. party wall, party structure and party fence wall) and explains when a notice should be served. The paper also covers the requirements for serving notice, types of response from adjoining owners, disputes and the development of a Party Wall Award. The writer discusses cases when damage does occur and provides examples of the Party Wall Act in practice.

• Understanding the Party Wall Act – Andrew Bussey (788 KB)

This paper provides an introduction to blanket and first loss policies, explaining why and when they are most commonly adopted.

The writer discusses some of the queries that might arise on blanket policies in relation to the adequacy of sum insured, value at risk calculation and application of average. With regard to first loss policies, the writer outlines some of the reasons and benefits of this type of insurance cover referencing underwriting considerations, insurance premiums and the nature of the risk.

• Download Blanket & First Loss Policies (461 KB)

Occasionally loss adjusters will be asked to consider fungal infestation in properties. This paper provides a useful overview of fungal decay, covering both dry rot and wet rot.

The writers outline the common indications of dry rot (typically the Serpula Lacrymans fungus), along with the environmental conditions required for it to develop, sustain and spread. Common signs of wet rot (typically the Coniophora Puteana fungus) are also provided. The writers discuss some of the possible causes of rot and how remedial measures might be approached. The insurance policy position is considered, along with useful questions to ask.

• Fungal Decay and Insurance Claims – John Carey & David Damsell (1.01 MB)

On some occasions physical evidence of claimed items may be non-existent or destroyed. In this paper Mike Weatherhead suggests ways by which loss adjusters might approach validation of quantum.

The paper covers buildings, domestic contents and commercial claims. The writer discusses different methods of enquiry and the types of supporting documentation that can sometimes be obtained. Options for validating stock are explored and the impact of a Contract Price Clause is highlighted. Reference is made to onus of proof and Treating Customers Fairly (TCF). This paper will support study for the AD1 – Application of the Principles of Insurance exam.

• Validation of Quantum – Mike Weatherhead (711 KB)