The Board Chronicles: Dealing With An Insurance Claim   4 comments

The Board Chronicles is an ongoing series of articles about the adventures of Mrs M’s Handmade as a vendor at community festivals & craft fairs. Mrs M’s subsidiary, Mr M’s Woodshop, has been approved to create this chronicle for the good of vendorkind.

In Velda’s mind, here’s what almost happened.

Velda was not harmed in the making of this photo.

Now, I’m don’t think she’s the Wicked Witch of the West, at least on a good day, but the truth is her booth was crushed by the Flying Dry Soup Canopy. This is the story of what happened after we picked up the pieces, left stormy Arizona and sought compensation from the company that owned that wind-blown destroyer.

Need to know what happened to cause this problem? Read that story in Wind. Blows. A Special Edition Of The Board Chronicles. Go ahead, I’ll wait.

First things first: I took pictures. I took pictures from each corner of Mrs M’s booth so I prove that we had been squashed by the Flying Dry Soup Canopy. I thought I took pictures of everything, but I really didn’t. I got everything I needed, fortunately, but wish I would have doubled the number of shots to get more close-ups. I didn’t have a good shot of the middle legs of the upside down canopy destroyer, for example. I had a long shot, but not one with as much detail as I would have liked.

Photos in hand, and once the shock wore off a bit, we proceeded to cooperatively disassemble the Flying Dry Soup Canopy … it was toast. Once it was off of Mrs M’s booth, we could see what had happened to her booth. Her canopy was also done for, of course, so we lifted it over her display and folded it up crushed it together so I could cart if off to the dumpster, as I was directed when I sought out event staff to ask what I should do.

Event staff, by the way, did not visit our booth and did not volunteer any direction as to what should happen or who should do what. We were on our own. Totally on our own.

I did salvage the canopy’s fabric top and walls. They all appeared to be somewhat soiled, but not ripped. I continued to take photos, documenting all of the damaged product, the damaged display pieces, the product on the ground, the broken signs … anything I could think of that showed damage, I took pictures of.

Anything.

I didn’t ask permission, I just took pictures. I thought they would come in handy.

They did.

We then proceeded with our day and completed the event. Once home, I got to work repairing Mrs M’s display, replacing broken pieces and missing hardware. Mrs M got to work replacing her product that was damaged, but all damaged product was held in case we needed more than photographic evidence taken at the event to prove the amount of damages we incurred.

Mrs M’s repaired booth, good as new.

Once we recovered, I reached out to the insurance agent with the contact information I was given on that fateful day in Arizona at Winterfest, in Lake Havasu City.

“I’m sorry, that agent doesn’t work here anymore.”

The Claim

However, the lead agent did come on the line and gave me an email address. I then sent them this letter, copying the client:

Thank you for your time on the phone today.

As we discussed, Mrs M’s Handmade was a vendor at the recent Lake Havasu City Winterfest. At that event, a windstorm on Saturday night lifted the canopy of your client, [Company Name/Client Name]. That canopy came down on top of our canopy, crushing it and damaging our products and display pieces underneath.

Amazingly, most of our products were undamaged. There were some broken display pieces. One display crate crashed and most of the products inside were destroyed (109 small lotion bars). Other product losses were nominal. The canopy, unfortunately, was a total loss. The main wooden display was somewhat damaged, and it had to have broken pieces and hardware replaced.

To figure the loss of business profits for this Sunday, I averaged the actual sales for our last 5 outdoor events, and figured the lost net profit from that.

Any questions? Please call me at the numbers below.

I enclosed an itemization of our damaged items, which included actual cost estimates:

  • 1, Undercover Canopy, commercial weight
  • 109, Small Lotion Bars, Replacement Cost
  • 8, Lotions, Replacement Cost
  • 1, Beard Oil, Replacement Cost
  • 1, Body Polish, Replacement Cost
  • 1, Loss of Business Profits, Sunday
  • 1, Bowl, Display Piece
  • 1, Picture Frame, Display Piece
  • 1, Repair of Display, 4 hours

Those are actual losses; I didn’t inflate any item. It doesn’t matter what others might do; I have to live with me. I played this totally above board. Just like life.

Also attached to the email were these photos:

The Denial

After 2 weeks, I got a response from a claims agent, who denied the claim. No idea if this was an automatic thing (as we all fear insurance companies that just deny every claim). Here’s the letter:

Dear Mr Mowry:

[Insurance company name] has been notified of your attempt to file a claim under our insured’s Commercial General Liability policy. After a thorough review of the evidence, documentation and evidence submitted, our findings indicate that our insured is not legally liable for the damages caused to your unit.

The loss concerned a wind storm which occurred late at night on the above-listed date. This wind event caused widespread damage to several vendor tents at the Lake Havasu City Winterfest trade show, including that of the insured. It has been reported that our insured’s tent blew over during this wind event, causing damage to your tent, your product, and affecting your ability to conduct business on the following day.

In review of the weather report for that particular day, it appears that these gusts of wind were in excess of forty miles per hour. Our insured reported to us that they had used – as they always do – five individual thirty-five pound weights hanging from their tent in order to secure it from such wind events that could occur overnight at the event. They also reported that his has seemed to work ever since they started their business.

It is our opinion that it is reasonable to expect that the weight they used, which totals 175 pounds, should be sufficient to hold down a ten-by-ten tent during a normal wind event. The wind event which occurred is considered an “act of God”. It is our opinion that our insured took all reasonable steps to protect against normal wind events, but it is not reasonable for them to expect that an act of God such as  this could occur. After reviewing the information available on this loss, we do not find that our insured was negligence (sic) in the cause of your loss. Therefore, we are denying liability for your damages.

In the state of Arizona, negligence must be proven by some breach of a duty of care. The results of our investigation show that there was no such breach. Therefore, we are denying your claim for property damage.

If you have any questions regarding this decision, please contact the undersigned.

The Refutation

I had questions. You bet I had questions.

Needless to say, I was a bit ticked. I took a deep breath, and that night, I responded to the claims agent’s letter. I sent the email to the claims agent that night, this time copying both their client and the original agent.

If there was any pressure that could be brought to bear from those quarters, I wanted it. I had no incentive to just follow the claims agent’s direction and only communicate with them.

Here is what I wrote:

Thank you for your response of March 8, just received today by me. You have several errors of fact in your letter that require your attention.

  1. I understand that your insured is surprised that their actions directly resulted in the destruction of our canopy and booth. However, their direct actions resulted in that damage, so they are liable. An act of God may have made the wind blow, but it was your client’s negligence that resulted in the destruction of my property. Absent your client’s negligence, we would not be having this conversation.
  2. Your contention that your client had 5 weights each weighing 35 pounds on their 10×10 canopy fails on many points, as follows:
    • They did not have a single 10×10 canopy. Rather, they had two (2) canopies that were bungeed together at the roof line. Those 2 canopies did not have 4 legs. They had 8 legs, as is clearly visible in the photographs that I submitted to your company.
    • Their weights were not found to weigh 35 pounds. I have made very similar “do it yourself” weights using PVC pipe and concrete, and I can assure you that their weights did not weigh 35 pounds each.
    • My wife lifted one of those supposed 35 pound weights with one arthritic finger.
    • I have another witness who will testify that those weights were definitely not 35 pounds each.
  3. Even if the weights did weigh a total of 175 pounds – which is a supposition that I reject – then that weight is STILL not adequate per the rules of the event. In fact, Winterfest requires each canopy to have fifty (50) pounds of weight on each corner of each canopy. Your client, therefore, should have had 400 pounds of weight on their two canopies, not the 175 that you claim.
  4. Further, the rules from Winterfest are clear that there should be 50 pounds of weight on each corner of each canopy. By your admission in the letter of March 8, your client did not weight all corners of their canopies with the required fifty (50) pounds.
  5. Further, your client weighted the four (4) outside corners, and then put one weight (not the two required to have one on each leg) in the center back. They did not weight the center front of their canopies at all, which happened to be facing the direction from which the wind blew. Therefore, their canopies were not weighted on two (2) legs in the most vulnerable section of their canopies.

It is my desire to resolve the situation amicably. However, if you persist in your insistence that your client is not liable for their canopies destroying my booth, then I will have no choice but to seek justice in the legal system. As you know, your costs will go up precipitously at that point.

Perhaps your client did not share with you that they did not follow the rules of Winterfest. Perhaps you have not personally evaluated each of the weights that your client claims to weigh 35 pounds. I offer you the opportunity to satisfy my original cost estimate, and deliver me a check in 14 days (March 26). If you choose to ignore that deadline or reject this claim outright, then the next conversation you will have will be with my legal counsel.

My original claim is attached for your convenience. We have since found additional damage caused by your client’s negligence, by the way, which is not included. Settle now, and the price will not go up.

Sincerely,

The Victory

The agent was back to me within 24 hours,

Thank you for your detailed description of the events as you understand them.  It was not brought to my attention that the event had specific rules for vendors to follow with regards to their operations.  Could you please forward a copy of these rules for my review, since you allege that our insureds were in violation of such rules?

Additionally, if there is more damage than simply to that which you listed in the document you forwarded, then we would ask that you provide information regarding such damage so that we may include it with your claim.

You bet I could forward the rules, sent within the hour:

The rules for Winterfest vendors are attached. These were a part of the standard event application that was signed by all vendors. The relevant information on booth weights is on page 2, under “Requirements:”

All vendors must have weights for any canopies in use. All four corners must have weights of at least 50 lbs. attached.

We agreed to the settlement that day.

Thank you for forwarding this.  It would appear, based on the rules all vendors are bound to for this event, that our insured did not, by their statement, take the necessary precautionary steps to secure their tent.

He invited me to submit the additional damages as well, which I did.

The check was received one week later, a week before my deadline.

I am no insurance expert; I did not consult legal counsel.

But, I won.

Morals of the story:

  1. Take lots of pictures
  2. Carefully document exactly what happened
  3. Know the event rules, and keep them on file. You never know when you might need to quote them!

4 responses to “The Board Chronicles: Dealing With An Insurance Claim

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  1. What a victory! Great letter

    Linda Stone-Abrams
  2. I am so glad you got this settled. I appreciate all of the advice you offered. Hopefully none of us will ever suffer the damage you and Velda did, but it’s good to have information on how to handle it. It’s that extra breath that helped. No emotion to cloud up the letter, just facts.

  3. Nice job. It is nice to have a favorable outcome.

  4. Excellent – the pics, the letters AND the outcome – exactly what I would’ve expected from you! Glad you got it settled rapidly!

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