The Role and Benefit of a Construction Insurance Claims Advisor

A construction insurance claims advisor is a professional with extensive experience and expertise in providing schedule and damages analyses in support of or defense against construction-related insurance claims including property damage claims, business interruption claims, and advance loss of profit and delayed startup claims. Insurance companies or insured project owners may hire a construction insurance claims advisor to assist with claims resulting from a project being damaged or delayed due to fires, explosions, or other covered events.

Construction insurance claims advisors help owners and/or insurance companies to determine rebuild schedules and/or costs associated with repairing damaged property, business interruptions, and advance loss of profits and delayed startup. Construction insurance claims advisors can also help owners and/or insurance companies by monitoring cost and schedule during project reconstruction and by providing litigation and arbitration support. Long International provides all these services and more, as detailed on our Services web page.

With respect to property damage claims, a construction insurance claims advisor may provide the following services and more:

• Assessment of the reasonableness of the insured’s as-planned rebuild schedule.
• Analysis of rebuild expediting costs not covered under a property damage policy but covered under a business interruption policy.
• Assessment of rebuild scope of work and costs to determine if improvements and betterments unrelated to the insured event are inappropriately included in an insurance claim.
• Determination of the minimum “normal-paced” duration of a planned rebuild schedule.
• Quantification of rebuild expediting costs including extra engineering costs; extra labor overtime premiums; extra construction equipment; extra project management and supervision; and labor productivity losses due to extra overtime, extra shift work, crowding, concurrent maintenance and plant expansion work, or performance problems and execution errors not covered by the insurance policy.
• Assessment of whether concurrent turnaround/maintenance and expansion project work also impacted the cost and duration of a rebuild project.

With respect to business interruption claims, a construction insurance claims advisor may provide the following services and more:

• Preparation of detailed critical path method (CPM) schedule analyses to determine the impact of changes and other non-insured work on the duration of a rebuild project.
• If a loss occurred during the construction of a new or revamped project, analysis of when the insured planned to begin production of saleable product prior to the insured event and whether that plan was reasonably achievable.
• Determination of the “but-for” date when production of saleable product would have occurred absent the insured event.
• Quantification of the delay to the startup and production of saleable product caused by the insured event.
• Assessment of whether other factors unrelated to the insured event (e.g., concurrent turnaround/maintenance or expansion project work) also delayed the startup.

With respect to advance loss of profits and delayed startup claims, a construction insurance claims advisor may provide the following services and more:

• Assessment of the effect of delayed events on the quantification of advance loss of profits and delayed startup claims.
• Preparation of detailed CPM schedule analyses to determine the impact of insured and non-insured delays on construction project duration.
• Determination of the “but-for” date when production of saleable product would have occurred absent delays not covered by the policy.
• Quantification of cost overruns due to discretionary change orders and other costs not covered by the policy.
• Evaluation of whether project delays and cost overruns existed prior to the execution of the insurance policy that, if not disclosed by the insured to the insurers, may void the policy.

Additionally, a construction insurance claims advisor may provide the following services and more during the reconstruction/rebuild phase of the project:

• Monitoring costs during project reconstruction to identify significant trends and evaluate the cumulative impact of changes on the cost of reconstruction.
• Monitoring schedule performance during project reconstruction to identify significant schedule deviations and evaluate the cumulative impact of changes on the duration of construction.
• Assessment of realistic mechanical completion and startup forecast dates based on actual schedule performance during project reconstruction.

Finally, a construction insurance claims advisor may also provide support services during mediation, litigation, or arbitration, such as:

• Developing electronic document databases.
• Providing mediation support and testimony, including preparation of trial or arbitration hearing presentations and graphics.
• Preparing expert witness reports and providing expert witness testimony.

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