Case studies on the subject The loss mitigation

4

Background:

The following are the four companies of the same event, which was damaged by the accident. And the financial impact occurred.

Events:

fire occurred at a factory producing 20% of equipment which has been damaged from the intense heat, which can not be repaired. The remaining 80% of the equipment is damaged by fragments from the flames, which caused severe corrosion.

A company

Value of 10 million US dollars
Worth of losses up to US $ 50,000
Worth of work to reduce losses Then carried
The claim of warranty Recognized

Results:

80% of equipment can be restored to the state before the incident, it is worth 1.1 million by the 20% of equipment which is beyond economic reconstruction, which will have to be changed. The insurance company cover all expenses.


 

B company

Value of 10 million US dollars
Worth of losses up to US $ 50,000
Worth of work to reduce losses Don’t get executed.
The claim of warranty Recognized

Results:

The company B lost more than 4.6 million US dollars. Loss Mitigation due to non-work, half of which had previously been damaged, but can be revived again. A condition that can not be restored anymore. While the other half, which need to work harder than the original 50% to make the device back to its original condition before the incident. Since there is no activity to minimize the damage occurred. The insurance company paid the claim for damages worth 3.1 million US dollars.The cost of the reconstruction of the event and the value of the equipment that is beyond economic revival.


 

C company

Value of 10 million US dollars
Worth of losses up to US $ 50,000
Worth of work to reduce losses Then carried
The claim of warranty Has been rejected

Results:

Company C lost more than 3.1 million US dollars. Although claims have been denied by the insurance company, but the company was able to restore C and mostly at the expense of its own.With the cost of restoring 80% for equipment worth 1.1 million US dollars. And the cost of the replacement of 20% that can not be repaired is worth 2 million US dollars. The operating loss mitigation company C has more choices than ever before.


 

D company

Value of 10 million US dollars
Worth of losses up to US $ 50,000
Worth of work to reduce losses Don’t get executed.
The claim of warranty Has been rejected

Results:

The company D lose money than 7.7 million US dollars. The claim has been rejected by the insurance company. The company D responsible cost in reconstruction and recovery is intact. Due to no work of relief loss.A state cannot recover any longer. While the other half, which need further work to make the equipment back to original condition as before the incident.

Source : http://www.birs.biz/case-studies/