Preparedness starts long before a fire occurs. Regular risk assessments, business continuity planning and appropriate insurance arrangements can help businesses respond more effectively and recover faster when disruptions arise.
When a fire occurs, the visible damage to buildings, equipment or stock is often only part of the impact. The real difficulty lies in maintaining operations, managing cash flow and recovering as quickly as possible.
Case study: Recovering and rebuilding after a major fire
Incident
The client is a medium‑scale food manufacturing business, operating from a combined head office and production facility. The business supplies products to domestic markets and relies on continuous manufacturing capability to meet customer contracts and revenue commitments.
A major fire broke out at the production facility due to heat from welding works in the pasteurising area. The incident caused extensive damage, resulting in the complete loss of the building and its contents and an immediate halt to manufacturing operations.
Business impact
The fire created significant operational and financial pressure, including:
- Complete loss of production capability at the insured premises
- Immediate supply interruptions that placed customer contracts at risk
- Exposure to substantial lost income during an extended recovery period
- Urgent pressure to relocate operations to maintain market position
Key recovery challenges
- Establishing alternative production facilities quickly
- Maintaining revenue and customer relationships during recovery
- Funding rebuilding works while continuing operations
What made the claim complex?
Reinstatement costs exceeded the building sum insured and the recovery involved multiple policy sections and stakeholders. Ongoing coordination was required between the insurer, loss adjusters, mortgagee and reconstruction contractors.
Additional complexities included:
- Significant business interruption exposure over an extended recovery period
- The need for staged and interim payments to fund rebuilding and operational continuity
- Complex reconstruction planning, including approval of capital additions
- A related liability claim for third‑party equipment on hire that was damaged in the fire, triggering cover under the care, custody and control provisions
How Gallagher supported the client
We worked with the client, insurer, loss adjusters, mortgagee and reconstruction partners to coordinate the claim and keep the recovery process moving.
The claims strategy focused on staged progress payments rather than waiting for final settlement. This helped provide cash flow for relocation, alternative production arrangements and rebuilding works, while we supported approvals for capital additions and worked with consultants to substantiate ongoing business interruption losses.
With coordinated claims advocacy, the business was able to continue production from alternative premises while rebuilding its original facility.
Outcome
The claim provided the financial support needed for a successful recovery.
Total Claim Reserve: AUD 11,000,000
The claim supported:
- Reconstruction of the original facility
- Business interruption losses during recovery
- Continuity of operations from alternative premises
- Resolution of associated liability exposures
The business successfully rebuilt its facility, maintained customer relationships and continued operating throughout the recovery period, helping protect its long-term viability and market position.
