How one storm led to a $240,000 insurance recovery for a coastal restaurant
Intense rainfall and storm damage allowed water to enter a popular NSW Central Coast restaurant, damaging property and threatening a crucial trading period. Equipment, stock and fitout were damaged and the doors closed during a peak trading period. The claim settled at $240,000, and most of that figure covered lost revenue the business never got the chance to earn.
What happened
The region had been through a run of storms over the preceding months, with intense rain and water damage across the area. In this case the water had a specific source. A council stormwater drain serving the street had filled with sand, sediment and debris over many years, which reduced its capacity to carry water away. When the heavy rain came, the system backed up through the street drainage network and flowed directly into the restaurant.
The water damaged:
- Equipment
- Furniture and contents
- Trading stock
- Internal finishes.
Trading stopped, and the timing of this event cost the business a substantial share of its revenue for the season.
Risk mitigation
Two things mattered in the first few days. The first was limiting further damage. The second was getting the claim moving and securing resources before the queue for these services built up.
Working alongside the client, we guided the immediate mitigation work, notified insurers without delay, secured the appointment of a loss assessor, helped gather evidence and supporting documentation, and coordinated communication between everyone involved.
Timing was the hard part. Assessors and restoration contractors across the region were in extremely high demand after the run of severe weather. We had an assessor appointed the next day, which allowed the claim investigation to start immediately. Repair contractors were stretched as well, though quotations and scopes of works came through quickly enough for the client to weigh up their options.
“Assessors were booked solid after those storms. Getting one on site the following day meant the investigation started while the evidence was still there to see,” says Adam Sulway, Director, Maple Insurance & Risk.
Timing the repairs around the trading calendar
The obvious move was to start repairs straight away. That would have meant closing during the busiest weeks of the year, at a point when a new competitor had just opened nearby and the restaurant needed to stay in front of its regulars.
The client took a different route. They elected to accept a cash settlement and engage a contractor of their own choosing and scheduling the repair work during the quieter off season. The business kept trading through its most valuable months and held onto the market share it had spent years building.
“Closing the doors in peak season would have cost the client far more than the repair bill. Settling in cash gave them the choice to control the work and jump at a moment notice when it suited their business”
– Adam Sulway, Director Maple Risk & Insurance
The outcome
Business interruption made up roughly seventy per cent of the settlement. That figure came out of a forensic review of the restaurant’s historical revenue, its seasonal trading patterns and its financial performance. The analysis is what allows a business interruption claim to reflect the real trading impact of an event and the full entitlement available under the policy.
Repairs were completed with minimal disruption, the business continued serving its customers and its position in a competitive local market stayed intact.
“The property damage number is usually straightforward. Business interruption is where the work sits, and it is the part that depends most on someone doing the analysis properly,” adds Adam.
What this means for other business owners
Insurance is easy to judge on price at renewal time. The measure that counts is how a policy responds when something goes wrong and how quickly the people behind it move.
Several things came together here:
- A client who acted quickly once the water came in
- Insurers engaged immediately
- An assessor on site next day
- A settlement structured around the trading calendar
- Business interruption figures built on real trading data.
At Maple Insurance & Risk our work carries on well past the point a policy is arranged. When a loss happens we advocate and negotiate on the client’s behalf until they have their full entitlement and can get back to trading.
If your business relies on a peak season, it is worth understanding how your policy would respond to a month of closed doors. We are happy to walk through it with you.
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Maple Insurance & Risk
Level 5, 20 Bond Street
Sydney, NSW, 2000
info@mapleinsurance.com.au
(02) 8329 0999
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Maple Managed Risk Pty Ltd trading as Maple Insurance & Risk is a Corporate Authorised Representative of Insurance Advisernet Australia Pty Ltd. AFSL No. 240549.
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