Equipment Breakdown Insurance Claims

A negligent contractor caused an electrical arc that shut down the insured’s computer system. Since the insured ran a computer cloud business, the breakdown resulted in all of the insured’s cloud customers also losing the use of their systems. Over the next few months, customers fled because they feared that their systems were not secure, resulting in a loss of business income. The insurer fought the claim, arguing that the customer could have left for many reasons, but we eventually prevailed in an appraisal and the insured was awarded $2.2 million.

The insured food processor found tiny shards of metal in some of the food products it had prepared, and traced the problem back to a malfunctioning machine. Since it could not be determined when the malfunction first occurred, the insured had to destroy all of its present inventory and recall much more, resulting in a massive business loss claim. We assisted the insured with the insurance claim and managed to obtain a significant confidential recovery.

The insured found us through this web site. He operated a northern Ohio chinchilla farm, and hundreds of his animals had died when the power went out to one of the buildings where the chinchillas were housed, causing the animals to suffocate from lack of ventilation. He had called in the claim to his insurer and it had only taken them two days to deny the claim because there was ostensibly no proof the power interruption was caused by a mechanical malfunction — the only arguable covered cause of loss. Rutter & Russin hired an electrician and an engineer, who pinpointed the cause of loss as a defective wire, which caused a motor to short out — a mechanical malfunction. The insurer finally accepted this conclusion, but then argued that the policy limited coverage for farm animals to $5,000. Once again, Rutter & Russin proved them wrong, and the insurer ended up paying its $100,000 policy limits.