With construction 60% complete, over $6 million already expended, and units already sold, the fire was a disaster for the developer and investors, having destroyed everything except for the parking area and the concrete slab foundation.

In the first week, the carrier sent a reservation of rights letter, telegraphing a possible denial of the claim based on a protective safeguard endorsement contained in the policy. Although the concrete slab foundation was not destroyed, there was uncertainty as to its structural integrity and the cost to rebuild had escalated 15-20% since the beginning of the construction. 

During claims negotiations, COVID-19 lockdowns were implemented, further delaying progress and escalating costs. The developer was faced with accruing interest on loans, cancelled contracts for sales of the units, and its own ongoing overhead as the general contractor for the project.

The carrier recommended salvage of fittings, appliances, and fixtures that had been stored in the lower level of the building, despite extensive smoke exposure.

Learn more about this case study and how The Greenspan Co./Adjusters International resolved the issues facing the developer and investors here.