IOTA Engineering, a leading developer and manufacturer of fluorescent emergency lighting, AC/DC power conversion products, and DC inverter ballasts, lost its 20,000 square-foot manufacturing facility in Tucson to a mid-summer fire.


  • How could the large, out-of-sight inventory be recreated?
  • How would the machinery that was built in-house be rebuilt? How and by whom would the machinery be priced?
  • With the company desperately needing office space to continue sales, could the reconstruction expense of a replacement sales facility be covered under the business income portion of their coverage, allowing the complete building insurance coverage to be allocated to reconstruction of the manufacturing facility?
  • Could temporary quarters be leased instead of purchased? Could they be paid for as an extra or expediting expense and subsequently have the lease payments applied to the purchase of the building?

Solutions Applied

  • IOTA, under the guidance of The Greenspan Co./Adjusters International team, helped to prepare the out-of-sight inventory of stock, tools and equipment. In concert with The Greenspan Co./Adjusters International’s inventory specialists and forensic accountants, a recreation of the entire out-of-sight business personal property was completed and properly priced.
  • The “team” got together and agreed that any option that would need to be exercised “outside the period of indemnity” would be inapplicable vis-à-vis the claim. As such, a lease was entered into for a temporary facility that allowed for the lease payments to be applied to the purchase price when and if the option to purchase was exercised. Since the option date was after all settlements and releases were concluded, all the lease payments could be applied to the purchase of the building, thereby saving IOTA many thousands of dollars.
  • There was a large amount of machinery that was unique to IOTA and built in place over the years by millwrights and IOTA employees to accommodate IOTA’s needs. With the help of The Greenspan Co./Adjusters International’s team and outside machinery and equipment consultants, replacement values including design, construction, etc., were prepared and negotiated.
  • A presentation was made to the insurance company that the cost to lease temporary office space, along with vehicle rentals and other extraordinary charges during the period of restoration, would be greater than the cost to permanently construct new sales offices adjacent to an existing facility. The new offices were built and a good portion paid for under the extra expense portion of the business interruption policy.


With the guidance of The Greenspan Co./Adjusters International’s team, meetings of the team’s players on a regular basis, and The Greenspan Co./Adjusters International’s knowledge and experience, IOTA was able to take full advantage of policies of insurance that were in place at the time of the fire. Many strategies were talked about and considered with only the best ones—and those that would withstand the insurance company’s tests and scrutiny—ever seeing the light of day. IOTA was fully compensated for its losses and most importantly, as the result of each person doing what he or she does best, was not only able to survive a disaster but to prevail as a result.