Case Studies details
Out in the Cold: Freeze Damage or Normal Wear and Tear?
Insurance Claim, North America
October 1, 2015
As many a homeowner knows, without proper precautions being taken, a hard winter freeze can burst pipes and cause damage to other home systems. The same is true of industrial process plants, especially in those that may have been shut down or temporarily idled due to unscheduled maintenance or market factors. In such cases, it is important that steps be taken to anticipate and mitigate the damage that can occur in areas subject to harsh winter weather.
A chemical process plant had been shut down for several years prior to being sold to a new owner with the intention of refurbishing and re-starting the facility. Prior to the refurbishment, a hard freeze was experienced in the area around the plant site, with temperatures plummeting to 14°F below zero. Several months later, when the plant was being inspected, workers discovered damaged piping and equipment, some of which appeared to have been related to the weather event. Since such weather-related damage was a coverable event under the owner’s insurance policy, a property loss claim was filed.
Baker & O’Brien was retained to review the detailed property loss claim and provide an opinion as to the most likely cause of the identified damages—the weather event itself, normal wear and tear, inadequate “mothballing,” or other factors. Our consultants visited the plant site to view the physical condition of the damaged equipment, interview key management and technical personnel, and examine relevant engineering design, operational and maintenance information. Our findings and opinions were then presented in an expert report which proved instrumental in the owner and the insurer reaching a mutually acceptable settlement of the matter.