Power Substation Fire Accident
A fire accident happened in the power substation of our client and the preliminary loss was about RMB 2 million yuan. The client had a Property All Risks Insurance Policy issued by A insurer and a Machinery Breakdown Insurance Policy issued by B insurer. Based on the accident report, this accident was caused by mice which got into electrical cabinet and gave rise to high voltage circuit and fire outbreak.
Usually property all risks covers natural disasters and accidents, including fire and explosion. Machinery breakdown insurance covers design defect, faulty operation, electrical accident such as overload, overvoltage etc. Anguo analyzed the causes of the accident and concluded that it belong to the scope of property all risks, therefore require A insurer to give compensation.
A insurer began investigating the cause of the accident, first put forward whether the short circuit caused by mice biting. Mice biting belongs to the property all risks insurance policy exclusions, we explained the exclusion to the customer, at the same time helped them to justify impossibility of mice biting technically. Then A insured putted forward, whether any design flaws existed or not in electrical cabinets so the mice can get into. When designing insurance plan for the customer, Anguo had already extended such risks by the extension clauses. Insurance company reviewed these clauses and accepted that the design defects belong to insurance policy. After several months’ investigation, A insurer ruled out the feasibility of the above exclusions, but in the end, they denied that the incident belonged to the property all risks, excused for faulty operation of staffs and issued refusal letter to the customer. 
Anguo suggested to client : 1)Though the refusal reason is not reasonable, but convincing A company needs to spend more time. 2)Due to the property all risks and machinery breakdown risk have complementary characteristics, we can invite B insurer to negotiations so as to promote the progress of the case as soon as possible. 
The client agreed to arrange a meeting with 2 insurers. During the meeting, Anguo emphasized on behalf of customer that the loss belongs to an accident, no matter through which type, our customer should be compensated. So the two insurers should negotiate about the policy terms, confirm which company should pay the compensation. After several hours of discussion, finally A insurer agreed to bear the liability for compensation.
Afterwards, Anguo suggested customer to cover 2 types of insurance through one insurance company so as to avoid mutually making excuses when loss happened, then our customer accepted our proposal to improve in the next annual renewal. Through broker’s participation, the insurance policy efficiency will be increased on the basis of insurance scheme design.
In the process of claims settlement, with the help of brokers, client can get a more reasonable compensation in the interpretation of the policy terms, claims data preparation and negotiations with the insurance company.

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