Our Unique Approach

Having worked on several major losses Struan Robertson became aware of the need for a very different approach to major losses. The traditional model of Loss Adjusting was giving rise to poor adjustments, disputes between Insurers and Insured’s, long and protracted settlements and mistrust between all parties involved.

Through this experience the Loss Management Plan (LMP) approach was developed. There are two major components to our approach to managing large losses: The Common Cause Report or CCR and the Loss Management Plan.

Common Cause Report

The first step in the Loss Management process is to identify the cause of the damage (unless it is an ‘act of god’ the cause of damage can often be quite a complicated series of events). This is where the Common Cause Report is particularily useful to both the Insured and Insurers. The principle objective of the CCR of course remains the identification of the proximate cause of loss, typically one of the following:

  • Errors in operation or start-up
  • Errors in maintenance or NDT
  • As constructed process flow
  • Design
  • Installation
  • Selection of materials

The development of a CCR starts with the establishment of a Common Cause Committee. This committee includes technical representatives from the Insured, Insurers and any consultants required. Factual data relevant to the cause is analysed and shared between all parties and compiled into one single report.

The advantages of this approach are:

  • The analysis of the cause is done by engineers and not lawyers
  • Disputes are avoided as there are no competing cause reports
  • Active cooperation between Insurers and the Insured building trust and adding value in the eyes of the Insured
  • Increases the chances of any recovery action if required

Loss Management Plan

The traditional approach of Loss Adjuster is to wait for the Insured to present a “claim” which is then run through policy conditions and reduced to fit within policy limitations. This approach often leaves the Insured frustrated, as they don’t understand their policy correctly, and they have already invested and spent funds in a repair or replacement which they assumed would be covered by their policy. This approach gives rise to numerous disputes.

The Loss Management Plan approach takes more of a project management or project finance approach.

The first step is to agree on the scope of damage, this involves the appointment of engineers for Insurers and for the Insured. The engineers get together and walk the site agreeing on what is damaged, these items are classified into location, quantity, engineering discipline and category of damage. Once the scope of damage is agreed, this scope of damage forms the basis of the priced scope of damage.

The agreed scope of damage is then put to tender or submitted to pre-selected contractors for pricing. The tender pack would include specific contract conditions required by Insurers and the Insured, it would identify any differences in design as well as project schedule, cash flow and funding requirements.

The LMP identifies objectives, relevant policy conditions in advance of spending funds.

The main benefits of the Loss Management Plan include:

  • Cost control before expenditure is committed
  • Control of the interruption period
  • Agreed methodology
  • Clear projections and funding requirements for both the Insured and Insurers