Claims negotiations take their time

Nine months after the loss triggered by the faulty generator, the policyholder quantified the losses resulting from business interruption and extra costs for the first time and submitted these figures to the insurer. It had calculated a business interruption totalling 22 months. However, the insurer had calculated an interruption of only nine months.

By way of example, a delay totalling fourteen days due to the reactivation of the deactivated blast furnace resulted in fierce discussions. Was this interruption (material was unavailable and unpaid workers were on strike) indemnifiable or not?

Since there was still no estimate of the first loss, there was no hope of settling the second loss. Therefore, both losses were negotiated at the same time – but no agreement was reached. Another problem was that there was still no consensus on the prior losses, so that compromise negotiations – the first step in the legal dispute – were launched. But they too failed. The policyholder sued the insurer. It was not until seven months later – almost three years after the first loss – that the parties came to an agreement on a loss amount for these two losses: after lengthy and complicated repairs and negotiations.

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