business hvac fire

Submitted by Anonymous (not verified) on Thu, 01/04/2007 - 20:31

My business has been down with a rooftop hvac(heating and air) fire. there is currently a dispute between my ins and the landlord over who is responsible. My lawyer says my ins should cover it and subrigate against the landloard if he feels the landloard is responsible. they wont

My ins also so far will not cover vent cleaning wall and rug smoke damage as they say they are not betterments by me. (i baught a pre existing busness and the lease was assigned to me). Landloard is resistant to covering anything.

Posted: 05 Jan 2007 09:25 Post Subject: Thanks!

Surely, its understandable that your insurance will work as the terms had been mentioned when you had signed for it . Thanks, Sasha.

Posted: 05 Jan 2007 11:14 Post Subject: Welcome to the forum!

Hi there..your case doesn't seem to fall within the 'Acts Of God'!
So its much better to wait till your insurer gets the better out of your landlord.
If your case remains unresolved, then as per law you always have the right to sue your insurer only after you have carefully read the terms. But you certainly don't seem to get a chance to fight it out with your landlord!
regards, Evan.

Posted: 05 Jan 2007 11:16 Post Subject:

Wooh let da dogs bark!
Lettur landlordy scream at the top!

Posted: 06 Jan 2007 02:04 Post Subject:

I see it as coming down to two things... the area that the policy you have covers and what your lease states.

Does your policy provide coverage for the dwelling your leasing? What about business loss?

You don't mention what type of policy it is so I doubt anyone can know if it should provide coverage.

Second, how does your lease read? That is, does it state that you are responsible for damages that happen to the leesors property?

Again, there are two main variables that are most important in this situation... what your policy states and what your lease states. You mention nothing about either. This makes it a _little_ difficult to comment on the situation.

In any case, you need to obtain a formal denial from your carrier (in writing) is they are not going to pay the claim. If they are not denying the claim at this time, you need to put them notice that you expect the claim to be settled w/o xx days (usually 30). You can also file a complaint with your states Dept Of Insurance in order to put a small fire under their butts.

Evan, he OP's insurance company is not going to "get the better" of anyone. They are denying coverage... simple as that. They won't go after anyone if they don't provide coverage and pay anything out. That is the OP's problem. If the OP's carrier formally denies the claim the OP can file a bad faith claim for his/her loss income (he/she does not appear to have an interest in the property damage). He/she can also file suit against the landlord for not providing usuable property as stated in the lease.

Posted: 06 Feb 2007 06:06 Post Subject:

Ok, nothing much has changed. As for the lease its 30 pages so I cant show a copy but it states I am responsible for "maintenance of the HVAC"

my policy states that I am covered for business personal property (and property in my care custody and control). bus and extra income.

I also have limited building coverage (tenant obligation) for items I am "obligated to repair or replace".

the adjuster states they will not cover because the lease states that the landlord is responsible if the damages are caused by an unavoidable casualty or accident.

My attorney states I should be covered due to the discrepancy in the interpretation of the lease and that the item is in my care and control and pertinent to bus and the ins should then subrogate

Posted: 06 Feb 2007 07:16 Post Subject:

Has your carrier send you a written denial? if not, they need to do this along with the reason for the denial. You don't mention if you agree with the adjuster or not. Have you reviewed the part of the contract the adjuster mentions? Do you agree that you are not responsible? This is a big part of the situation as only you can tell us what the lease states regarding this matter.

You need to obtain the formal, written denial from your carrier and give it to your landlord. Your landlord then needs to react to the information. If you are paying on the lease, the landlord is responsible for the repairs, and this situation is costing you loss income, then you need to also hold the landlord responsible for that loss income if he/she won't honor the wording of the lease. Here is the important part... you don't need to make up your own mind about the wording of the lease, you only need to light a fire under everyone's butt. If you carrier denies coverage due to the landlord being responsible, then you need to go against the landlord with the same info. If it turns out later that the lease state you were responsible, then you have a bad faith claim against your carrier and it's worth some _BIG_ bucks!

Insurance companies almost _never- pay claims they don't think they owe and then subrogate. It's bad business (as once you've paid a claim, it's almost impossible to collect from another party). They may pay a claim they _think_ they owe, later to find out that they don't and then they will of course attempt recovery. But that is not really the case here.

My recommendation is that you obtain a writen denial from your own carrier. They need to point out in the denial _why_ they are denying coverage. You then need to give that letter to your landlord along with a letter from yourself giving him/her xx days (usually 30) to correct this situation and also point out the part of the lease your carrier pointed out to you.

What your doing is putting everyone else on notice of the exact nature of your loss (loss income and also property dmage). That way if they do anything incorrectly, you can come back against them later on. You don't care who is right or wrong, you just need to be able to hold these other people responsible for their actions.

Now, if thsi situation is not corrected in a very reasonable time and you are loosing business then you may want to make the repairs yourself (to midigate your loss) and then go after everyone else for your loss. However, it might be better to allow your landlord to react as if you pay it out of your pocket, _you_ will then need to incure the expense of recovery which may not be cheap. Again, if your carrier denied the claim incorrectly, you have grounds for a bad faith claim for any additional loss their incorrect denial caused you.

One more thing... your landlord really needs to report this to his/her own property carrier to get them involved. It's always better to have a carrier consider paying money as they have lots of it and are regulated by the state (they answer to a higher authority). Getting a person to pay their share is more difficult as it's money out of theur pocket.

Hope that helps.

Posted: 06 Feb 2007 10:17 Post Subject:

thanks. so far the landlord (big national co) has to my knowledge not reported it to thee ins co. They have their lawyers (on staff) and risk management people speaking to my ins co. They insist that I am responsible despite what the ins co says. Today thir lawyer contacted me to get in touch w my lawyer. I believe my lawyer is going to tell them to fix it and sue me if they feel Im responsible. He says my ins will be obligated to defend the suit and a judge will sort it out

Posted: 06 Feb 2007 11:16 Post Subject:

Exactly... your insurance appears to cover you for such a loss but they are stating your lease does not obligate you to the repairs. So if they are wrong (and your landlord holds your responsible), your carrier will provide a defense. Also, if they are wrong, I'd guess you'd have a good bad faith claim against your carrier (i.e. if they would have correctly paid your claim, your loss would have been much less. So they would then be obligated to pay for _every_ part of your loss. Even things that may not be covered under your policy). By putting your landlord on notice, you are telling them that they are breaching your contract in not providing the service your paying for. If they refuse to pay then you might need to file suit against them (I doubt it will come to that). if you file suit against them, then you also file against your own carrier at the same time and have the court determine who's at fault (we call that, "bring everyone to the table". Your there in court anyway... it does not cost anything more to bring everyone and their mothers there with you :>).

I really think with your landlord and your carrier speaking that they will figure this one out. In the meantime, you need to be lighting the fire under both their butts (again, moving through the official channels of putting them on notice of what you will do and when, if this is not resolved).

But, if if your carrier ends up paying the claim, it sounds like you'd still have a bad faith claim against them for any additional expenses incured as a result of them not paying timely. This is why you need to have "take action by xx date" letters out there. So if things go bad, you can show you gave a reasonable deadline and be able to clearly show what your additional loss was due to someone not doing what they should have.

I know this situation is stressful. Sometimes there is just no way around it, though. I'd agree that things like this should not happen... but that is not to say that there is a lot of grey areas out there and this is not a perfect world.

Posted: 10 Feb 2007 07:12 Post Subject:

JL - I am sorry that this happened to you. tcope is correct...just make sure to keep very good records and get everything that you can in writing..this will help in the long run. Good Luck with this my friend.

Posted: 19 Mar 2007 02:21 Post Subject:

still going on. I have anouther question. My ins is also giving me a problem paying for cleanup/painting. They state thew walls and floors are also the landlords problem because other they were put in by the person I baught the business from and didnt put them in myself.

He also states that the fire report states the fire was a "smoldering fire" and therefore if the HVAC unit is to be replaced by me they will not cover because there is no proof there was an "open flame"

Posted: 02 Apr 2007 09:53 Post Subject:

I'm not a property adjuster so this is getting a little out of my scope but I still think the orginal situation exists... is _your_ insurance going to handle the loss? You mention that they are looking into the damage but don't mentioned if the initial coverage issue has been resolved.

I can see that your policy may only cover "fire" and that your carrier might be viewing this as a mechanical breakdown or a power surge but I think there is a very fine line here. I don't know if I can really mention more without knowing the whole situation and reviewing all of what was known... again, I'm also not a property adjuster so I don't know much about the property coverage.

Please keep us informed. I'm really interested to hear what happens.

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