[author: Ryan Krushelnitzky]
The nature of major fire losses is such that they often give rise to challenging issues surrounding causation, proof, and quantification of damages, and to disputes between multiple adverse parties. It is vital to obtain as much information as early as possible after a major fire loss. With that in mind, the following five-steps can serve as a useful checklist when faced with a major fire loss:
1. Step 1- Immediate Steps: Two things to consider immediately are to: (i) make sure the site is secure so that no one gets hurt, and (ii) take immediate steps to preserve and secure the property of your insured.
2. Step 2- Obtain Information: Following these immediate steps, attempt to obtain as much information as possible about the loss. Visit the site and document it by photographing all angles of the area, both inside and out. Try to obtain as many drawings of the building as possible, for example: construction, as-built drawings, or fire evacuation drawings. These drawings can then be cross-referenced to the photographs. Contact, and get as much information as you can about the fire loss, from: (i) your insured, (ii) the fire department, (iii) the fire department incident commander, (iv) any witnesses to the fire, and (v) the person who called the fire department. Do this sooner than later-- with time, people move away and their memories fade, so contact them when the incident is fresh. It is also important to gain an early understanding of the scope of damages. Obtain a contents listing, along with quotes to rebuild the damaged building as soon as possible. The key in gathering this kind of information, as with all information gathering, is organization.
3. Step 3- Retain a Cause and Origin Expert: Determining the cause of a fire will be an essential step in proving liability. However, not all experts are alike. Check the qualifications and experience of your experts. Have they ever testified in court before? Have they ever written any articles in the field? Meet with and get a feel for your expert. Do they present well and act professionally? Much later, if the matter ever proceeds to trial, the ability of your expert to communicate technical matters in a straightforward way will be important. At this point in time, provide your expert with an outline of any major timelines you may have.
4. Step 4- Subrogation Potential: Have your cause and origin expert identify who is potentially at fault for the fire. Check for any product recalls. If there is a potential for subrogation, make a note on the file. Try to put any potentially adverse parties on early notice so that they are provided with an early opportunity to conduct their own investigations.
5. Step 5- Preserve the Evidence and Avoid Spoliation: Preserving the evidence is important, both to make your case in the future, and to avoid any allegations from adverse parties of spoliation (i.e. that the evidence was destroyed along with their ability to defend themselves). If you ask your expert to preserve evidence, follow up with a letter. Ensure your expert rules out all other potential causes of the fire, and documents and preserves the evidence which rules out those causes. Do not allow your expert to conduct destructive testing without a written agreement from all potentially adverse parties. Ensure that potentially adverse parties are given an opportunity to view the evidence, and ensure that all communications are in writing.
In sum, major fire losses will give rise to challenging issues surrounding causation, proof, quantification of damages, and dealing with multiple adverse parties. Obtaining as much information as possible within the first 72 hours of a loss will be of significant importance with respect to any future claims. So too will the early identification of potentially adverse parties, along with the provision of notice to those parties.
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