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Maintaining Market Share

How one client maintained their Market Share after a critical Fire
Wednesday, October 15, 2014 | By Lynch Insurance Brokers
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Maintaining Market Share After a Critical Fire


The Client is a wholly owned manufacturing subsidiary of a regional conglomerate who supplies both the local and regional market. The regional distribution comprises a substantial portion of the company’s annual revenue.

The Client’s purpose-built premises had adjoining buildings for manufacturing and warehousing and a separate building for administration and maintenance.  There were no sprinklers installed in any of the buildings, but the manufacturing building’s butane storage container was protected by a drenching system with a substantial water supply.

Unfortunately, a large fire broke out in the manufacturing and warehousing buildings, completely destroying all equipment and product inventory. The fire did not affect the administrative and maintenance building. Knowing this would be an overwhelming situation for the Client, Lynch personnel visited the Client’s premises at the time of the fire and immediately thereafter to commence loss mitigation and the claims process. 

On initial inspection, it was clear that the fire-struck buildings would need to be demolished and removed from the site; however the administrative building could remain intact.  Lynch worked with a team of engineers and building contractors who assessed the replacement cost of the buildings and related equipment on an expedited time scale.


Lynch facilitated immediate commencement of the claims process, but the Client’s greatest worry was the Business Interruption Claim. While the Gross Profit Loss was covered by the policy, the Client was justifiably concerned about their potential Market Share Loss, especially in the regional market. There was no local factory that could undertake production for the Client, nor could competitors be asked to assist.  Analysis confirmed that a UK manufacturer could produce the necessary products on the Client’s behalf, but the Client was worried that costs would be prohibitive.


During consultation, Lynch advised the Client that the Business Interruption policy designed not only covered Loss of Gross Profit, but also covered Increased Cost of Working. Simulations were carried out and Lynch was able to show to the Client that they could leverage the external manufacturing and delivery from the UK, the cost of which would be accommodated by the Increased Cost of Working provisions under the policy. This not only allowed the client to quickly continue to supply their markets, but also reduced the final Loss of Gross Profit claim given that there was little disruption to their revenue streams.

Through effective Risk Consulting, Lynch ensured the Client achieved full indemnity for Business Interruption and most importantly, maintained their established Market Share. The Client attributed their economic survival to Lynch’s effectively designed Business Interruption policy and adequacy of the sums insured.



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About Lynch

Lynch Insurance Brokers Ltd. is a risk advisory and insurance services firm. Our mission is solving our client's key risk concerns and in so doing make them more successful. We are an Associate company of Marsh Ltd., and are able to leverage their international expertise and market access to deliver innovative thinking to addressing our client's risk and insurance needs.

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©2014 Lynch Insurance Brokers, St. Michael, Barbados. All Rights Reserved. Lynch Insurance Brokers believes the information in this document is accurate as of its publication date; such information is subject to change without notice.  Lynch Insurance Brokers acknowledges the proprietary rights of other companies to the trademarks, product names and such other intellectual property rights mentioned in this document.  Except as expressly permitted, neither this documentation nor any part may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, printing, photocopying, recording or otherwise, without the prior permission of Lynch Insurance Brokers and/or any named intellectual property rights holders under this document.

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