Major losses are unusual for most public sector organisations. But, as Andew Millard, public sector practice leader – North at Aon and Paul Warren, director of claims consulting at Aon, explain, when they do occur, it’s worth turning to the experts.
Having the right insurance in place gives the reassurance that if the unexpected happens, you’re covered. But, if your organisation experiences a major or complex loss such as a fire, explosion or flood, it could be worth calling in the experts to deal with the claim.
Fortunately, major losses are unusual events for most public sector insurance managers, with most only experiencing a few during their careers. But this can make them even more challenging when they do occur.
Complex cases
Major loss claims can be difficult to manage. Unlike a simple property claim, a major loss is likely to be complex, involving multiple heads of claims. For example, if a university loses access to student accommodation following a fire, there could be business interruption and financial losses to consider as well as the reinstatement of the building.
Insurers also expect a lot of information to support a claim for £1m plus. Collecting data on the extent of the loss but also details such as the asset and asbestos registers and the number of people that use the building will require input from different departments, typically including estates, finance and procurement.
Coordinating this information gathering process takes time and considerable resources: we would recommend at least one person working full-time on this exercise to complete it effectively. Dedicating this resource at a time when employees are already stretched can be tricky.
Centralising the communication flow is critical to an optimal claims outcome. Chances are, you’ll be dealing with several insurers across a complex claim. This is particularly the case in the current market where co-insurance is increasingly used to spread a risk across two or more insurers. Determining which insurer deals with which element of a loss can add a further layer of complexity. Having a controlled approach to the loss adjustment and insurer queries ensures nothing gets misrepresented or delayed.
Expert support
Where an organisation does experience a large or complex claim, it could be worth calling in the experts. Large losses are everyday occurrences for claims consultants, whereby they are used to providing immediate guidance to remediation, damage assessment, and quantification while also taking over communication with insurers.
When an insurable loss occurs, a claims consultant can deliver considerable value. They will oversee the claim, liaising with insurers to determine liability; collecting all the necessary supporting information; and monitoring cash flow throughout the claim. As they know what’s required and have dedicated resources to fulfil the data collection exercise, this can save your organisation considerable time and effort.
A claims consultant can also use their experience to suggest more creative – and cost-effective – solutions. As an example, when a university’s lecture halls were out of action following a fire, we recommended hiring a local cinema rather than building a temporary classroom. It was an instant lecture hall and, as the cinema wasn’t in use during the day, hiring it was straightforward.
Their experience also means they will have all the necessary contacts to support more unusual losses. For instance, a fire in a swimming pool is rare but, at Aon, we’ve seen this a few times and know exactly which specialists to call to carry out the necessary assessments and remedial work.
A claims consultant is also independent. While an insurer will appoint loss adjusters to assess a claim, the claims consultants role is to operate with the intent of the policyholder to deliver the most appropriate solution to the organisation, underpinned by a comprehensive understanding of the policy operation.
Delivering value
Insurers are moving toward further inclusion of policy extensions that support pointing an expert on behalf of the policyholder. Professional fees associated with claims consulting can also be included within insurance cover. Adding a properly worded claims preparation or claims management clause to a policy is a low-cost option.
Whether or not the services of a claims consultant are included in a policy, the involvement of technically skilled personnel should be seen as an investment rather than a cost. Where there’s a large loss, their understanding of insurance and claims will deliver financial benefits both in terms of expected quantum generated from the policy wording, as well as cash flow.
As well as identifying policy liabilities that may have been missed or suggesting more creative ways for the organisation to recover from the loss, simply having a dedicated resource to oversee the claim can deliver major benefits. Having this expertise to hand can take pressure off staff and shorten the time it takes to settle a claim – saving time, money and hassle.
And, with major reorganisation underway across local government in England, it’s worth keeping these services in mind. As restructuring can mean internal expertise and resource is lost, knowing who to call in the event of a major loss could be invaluable.
More information
To find out more about how a claims consultant could support your organisation during a major loss, speak to your Aon account manager or contact Andrew Millard ([email protected]) or Paul Warren ([email protected])
About Aon
Aon plc (NYSE: AON) exists to shape decisions for the better — to protect and enrich the lives of people around the world. Through actionable analytic insight, globally integrated Risk Capital and Human Capital expertise, and locally relevant solutions, our colleagues in over 120 countries provide our clients with the clarity and confidence to make better risk and people decisions that protect and grow their businesses.
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This article has been compiled using information available to us up to 01/09/2025.
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