A Well Managed Loss

  • enVision 10.2

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A fire erupted on the conveyor line at an AFM insured's frozen pastry facility. Fortunately, they chose to operate in sprinklered facilities, which helped minimize the loss. However, potential contamination of their finished goods in storage, which could have resulted in loss of sales and market share, needed to quickly be addressed. Through great partnership between the broker, client and AFM, the claim was quickly resolved, returning the pastry maker to business with minimal interruption.

Growing Together
The partnership began in 2009. At the time, the account consisted of one main production plant. This sprinklered facility handled the pastry company's entire line of products. Soon, as sales increased, the company outgrew the original facility and decided to buy an additional sprinklered building to boost its production.

Value proposition
Soon after the acquisition, a meeting with the broker, client and AFM was set up to discuss overall risk improvement on the account and the upcoming property insurance renewal. From an engineering standpoint, this client was aligned with AFM's loss prevention philosophy, and over the years, they had done a great job improving the quality of its risks.

While the relationship was strong, both the broker and AFM were facing competition as the result of increased capacity and new players in the market. And, while the insured's chief financial officer (CFO) believed that both the broker and AFM added great value by delivering broad coverage and high-quality service, he had never experienced a loss first-hand, and therefore, expressed concerns about how AFM would respond—and keep its promises—in the event of a severe loss.

The CFO asked for examples from past losses that demonstrated AFM's ability to effectively adjust claims. Despite the numerous claims excellence awards presented by the broker on behalf of AFM, the CFO was still skeptical. Unfortunately, the real-world proof he sought would come sooner than anyone ever could have imagined.

Fire Strikes
Less than a week after the meeting, a fire broke out on the conveyor belt of a production line in the newly acquired building. The fire was controlled by seven sprinklers with limited damage to the production line and no contamination to the adjacent storage containing finished pastry products. Shortly after the fire, the AFM loss adjuster contacted the client to discuss additional mitigation measures needed to limit smoke damage.

Back in Business
Working closely with AFM's claims and engineering departments, as well as decontamination contractors, the client was able to mitigate the loss and quickly restore all affected equipment. In fact, all production activities resumed within four days, and due to excellent cooperation between the insured and our adjuster, the loss was settled less than a week after the fire occurred.

As a result of proper planning, adequate inventory availability and quick claims resolution, this minor business interruption did not result in any loss of sales.

Demonstrating Value
While the client was initially skeptical about AFM's ability to deliver on its promises, this fire at their primary production facility demonstrated AFM's commitment to deliver "prompt, professional and fair claims service."

Both the broker and insured were very satisfied by the way AFM handled the loss and assisted during a challenging time. As a result, the client followed its broker's recommendation to renew the property insurance policy with AFM. This is just one example of AFM's commitment to building long-term partnerships with our brokers and clients.


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