Client

Australian producer of high quality direct shipping grade iron ore products.

Sector/class

Onshore property/business interruption coverage.

Background to the claim

The claim came about following the collapse of a seawall at the insured’s iron ore mine on an island off the coast of Western Australia. The seawall fully collapsed over a period of three weeks, suffering severe damage due to tidal action. There was a series of three slumps experienced.

What was Miller’s role in the process?

Miller was responsible, together with the assured, for convincing the insurers that the claim was due to one proximate cause, therefore one claim and not three. We also proved that the cause was ‘action by the sea or tidal wave’, which was an insured peril.

Miller also took the lead role in negotiating the settlement, which occurred over several meetings. The property damage (PD) and business interruption (BI) claim amounts were settled separately. The settlement amount for the insured’s PD claim (total loss of the seawall plus removal of debris, damage to plant and machinery) once the above issues were resolved was relatively straightforward.

However, their BI claim was particularly complicated, with many different theories about how the loss of turnover should be calculated and a number of different accountancy standards being considered. Each theory had a massive effect on the calculated BI amount, with variances of more than AUD40m.

Final outcome

The insured’s PD/BI claim was successfully settled for a total sum of AUD155.5m. Miller demonstrated tenacity when negotiating, making the most of our strong market relationships and technical ability to find the best resolution for the client.