Case Studies
The clinker stage of cement production has two rotary kilns (#7 and #8), fed with raw materials by two raw mills. The clay silo at the proportioning station of the second raw mill collapsed, leading to severe damage to the silo, hoppers, structural steel, weigh feeders, conveyor belts, and associated electrical wiring. The initial verbal indication of loss from the site was a loss of $67.5K per day, with a repair period of up to 6 months, which represented a potential loss of around $10M.
We observed that the insured had 3.5M tons of strategic clinker stock (enough for 5-6 months). Therefore, the effect on cement production (and sales) would not equate to the loss of clinker production. While the insured also sold clinker as a finished product to export to customers, this only represented a small percentage of its sales. We did not observe any knock-on effect of the lost clinker production on the insured’s sales during the initial downtime period.
Upon completing debris clearance and damage surveys, the damage was less severe than initially indicated, and repairs could be undertaken within 2-3 months. Further, we observed a one-month shutdown was already planned on the affected kiln, absent the loss. We also observed that the sum insured for BI may not have been adequate. Therefore, any calculated loss would need to be proportionally adjusted accordingly.
After sharing our initial observations with the adjuster and insured, the insured’s representatives informed us that it was withdrawing the BI claim despite the initial intimation in the region of $10M.
Daniel Thorpe
Executive Vice President
Forensic Accounting - Insurance Services
+971 56 658 3620
[email protected]
> Business Interruption / Lost Profits
We provide specialized expertise in the quantification of damages related to claims and disputes involving business interruption and lost profits. Our team combines their financial expertise and diverse backgrounds to effectively evaluate the insured's/claimant's operations and industry/market-specific factors, to quantify interruptions and lost profits.
> Forensic Accounting
Our Forensic Accounting Practice includes Certified Public Accountants, Certified Fraud Examiners, Certified Financial Forensics experts, and other financial experts who specialize in financial investigations, dispute resolution, and regulatory compliance. We deliver the truth behind the numbers in financial matters involving insurance claims and disputes, business interruption/lost profits, cyber damages, Delay in Start-Up (DSU) / soft costs, extra expense, family disputes, fraud, labor & employment disputes, personal injury damages, and bankruptcy/insolvency.