Commitment Reinstatement: While often discussed at length, proof of communications with 3rd party suppliers may need to be requested to confirm the process remains on schedule. Continued engineer and other relevant consultants’ involvement in the reinstatement process is critical. In this case, the utility repaired a portion of their existing units but also elected to replace one of the damaged units with a modern system. There were challenging delays as the insured often failed to respond directly to requests for support indicating the damaged components were on order. In this case, and as indicated above, this ultimately did not factor into the resolution of this loss.
Temporary Power Solutions: When evaluating the need for temporary generation support, consider robust options. In this case, we relied on multiple smaller units anticipating an earlier reinstatement. During the first quarter of the adjustment process, large units were considered but ultimately not utilized due to their upfront cost. However, over the length of this adjustment, this cost would have likely still resulted in a net savings vs. the smaller units.
Nameplate Capacity: Generator nameplate capacity is generally defined as the generator’s maximum output at full continuous power. This should not be confused with the capacity factor (maximum output to actual output), especially on smaller units operating in harsh operating environments. Even when utilizing an N-2 operating contingency (which is often based upon nameplate), this may need to be evaluated to account for operating conditions.
COVID-19 Plan: There was no COVID-19 plan, and one should not have been expected given the novel nuances of the COVID-19 pandemic (global restrictions on travel, work, etc.). The adjustment team, insurers, and insureds rapidly moved to evolving communication platforms, and as soon as time allowed, appropriate experts were allowed on site. This “lesson learned” likely applies to all industries and businesses as the modern world has evolved in such a manner that the initial challenges of potential future global events will likely prove less daunting.
Communication: In any loss evaluation, communication channels are critical to resolution. Despite weekly meetings, requested data lagged, and commitments to reinstate were difficult to obtain. This potentially resulted in increased extra expense and business interruption losses (and likely increased costs of replacement parts). One should insist on firm commitments for deliverables from periodic meeting opportunities.
Value-Added Tax (VAT): Many governments will suspend VAT on certain items in response to catastrophes. When analyzing property damage-related invoices, it is important to confirm that VAT taxes are only being charged on those goods and/or services for which VAT continues.
It’s important to note that the collection of losses on which the article is based are not examples of non-collaborative efforts but, instead, an example of most loss adjustments. Parties begin convergence at two separate points, both with ideas as to how the adjustment process will resolve itself. In losses with challenges such as these, the points (the insured’s representatives and the adjustment team) begin to come together via dialogue and information exchanges which often alter the path of the other. All the matters on which this is based on were resolved without litigation, mediation, or other third-party assistance.