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On May 8th a long time client and friend calls me to provide coverage for his new 51000 square foot shell building he is buying to move his growing call center company and he is excited about his purchase. We insured the building for $5,100,000 to get through binding expecting that once renovation was complete, the replacement cost would be closer to $7,000,000. We provided the bank the needed information and the building was purchased without a hitch. Immediately after the closing, my client who has a good friend that is a general contractor charges his “GC” with managing the project. The “GC” begins by getting bids to fix the roof, air conditioning, interior, and exterior. Within a couple of days of closing, the building was starting to be power washed to allow for some additional tuck pointing that needed to be done to “tighten up the building”.
About 10 days after we bound coverage, the building was vandalized and much of the copper wiring and plumbing was removed from the building in an overnight “rip out”. My client and his “GC” called me in the morning to advise and we turned in a claim. Due to the scope of the damage and the complexity of the claim, it took the carrier and the client about 3 months to pull together all proper bids and information to complete the claim. The total claim looks to be about $450,000.00.
Last Thursday I was contacted by my client and asked if his attending a deposition was normal. I stated that it sounded strange with the facts that I had, but I would contact the adjuster. The adjuster informed me that there was a lot of information flowing back between the parties (client and carrier) and wanted to get everyone in the same room to answer any and all questions. That sounded reasonable and thus I advised my client that this should wrap up the claim. My client asked, “Can you join me?” I answered, of course. In 16 years in the insurance business, I had never had the opportunity to sit in on a deposition of one of my clients. Also, I wondered, how do we treat OUR clients in deposition?
Yesterday morning on my way to the deposition, I got a call from the lawyer that is representing my carrier. He asked that I call him immediately and that he was preparing for deposition. I called him back and as he began to ask me questions, I stated “are you at the law office?” He replied, yes, I stated, “I’m almost there, we can chat in person”. At this point, he informed me he would “not allow me to be present during the deposition”. I thought it was strange that my carrier’s counsel did not want me, the agent in the room.
I met my client and his attorney at “the law” office and as we started up the elevator I was informed we were in for a fight, that my carrier’s counsel would not let me attend. Not being afraid of a challenge, I said, I’m going with you. As we entered the room, the counsel for my carrier was pleasant, but edgy. He reminded all that he did not think I should be there for the deposition and asked that I leave. I stated I would rather stay and since he did not want to physically remove me, I had the pleasure of watching my first ever deposition of one of MY clients, by one of MY carriers.
The deposition started pretty benign. My carrier’s counsel asked, name, date of birth, where my client went to school, etc. It was soon they’re after that the grilling started. As I watched my client try to answer questions that were clearly not questions he would know, I became more and more frustrated. As the 3 and a half hour meeting progressed it was clear that MY carrier was hanging their hat on the fact that this was a vacancy issue. But alas, I’m one of those weird agents that actually read the forms. I know that a building under construction is not considered vacant. Clearly from all the information provided, the building was “under construction” after the closing date, but prior to the loss.
I have never been more embarrassed to be an insurance agent than I was yesterday. My client in good faith paid his premium, suffered a loss, and now was subjected to this asshole (my words, not his) berating him for not understanding the nuisances of the construction business. For example, Lawyer: “Mr. Client, how many bids did you receive on this project?” Client “None, my contractors been with me for 10 years, had done 4 other projects, and thus I let him manage the project.” Lawyer: “So you are going to do a million dollars of renovation and don’t get any bids?” Client “that is correct”. Having known this client for many years now, this is not surprising, he’s a relationship buyer and one’s he has a level of trust, he allows his “friends / vendors” to manage his business life.
My client is very successful. This is his forth company since graduating college and it’s growing at 1400%. The reason for the purchase of the building was to house “the growth”. Obviously, deposing the client at this late stage of the claim is not sitting well with my client, his counsel, or myself.
Knowing what I know, the carrier at sometime in the near future will be cutting a check for the amount of the loss minus the deductible. The lawyer for my carrier will be terminated due to his being an asshole and this claim will serve as a case study for how not to handle a claim for my carrier. People hate the insurance industry and after sitting through yesterday’s deposition, knowing the facts as I know them, I don’t blame them one bit!
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