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Whitey (Whitey)
Posted on Tuesday, September 12, 2000 - 6:33 pm:   

Tom, here is my 2 cents worth. From what I read you are working this from a liability situation. A loss has occurred which is being alleged to have caused a devaluation and loss of sale to the property. Appears from your scenario that the claim is being made by a real estate broker. First party BI coverage generally only applies to the described premises unless there is an endorsement which would extend the coverage to Dependant Properties. This is not to say that there would be coverage for the loss of sale of the proprety, but depending on how the underwriter intended to provide coverage, (intent) you may have something. Loss of sale should be easy enough to evaluate by checking recent real estate transactions for similar property in the area, verifying the broker's commision and calculating the net income.

The devaluation of the property has two possible claims. The owner of the property can establish by comparable properties and appraisal, the loss in value. This same loss in value can then be multiplied by the broker's commission (less expenses) and you conceivably have the loss to the broker.

In a pure liability situation, I am making the presumption that the actions of your insured have caused the damage, the only party that should be able to make a claim is the owner of the property. Although,we do recognize that the courts can and do open the doors for anyone to make claim. It would not appear that the real estate broker will have suffered a loss until the property is sold unless there was a contract for the sale which was voided due to the damage.

A lot of areas to address. Good Luck

David Bennett
Murphy (Murphy)
Posted on Tuesday, September 12, 2000 - 5:31 pm:   

tom; what state are you presently working in?
Andrew Sloane
Posted on Sunday, September 10, 2000 - 11:46 am:   

Being from Texas, the only BI loss the realtor could sustain from what I can see based on the limited info provided would be a crop, such as hay etc. that was grown for sale. Jim is right on the money. What negligence occurred? What duty breached, did a party forget to water it? Proximate causation being it died thus causing negligence or maybe it burned by a negligent party. I don't see any liability in this instance as far as BI is concerned. Just a thought as I handled a loss similar to what I described.
Posted on Saturday, September 09, 2000 - 1:34 pm:   

tom- from reading your post, it sounds like you may need a casualty man more than a b.i. man. and additional information would be helpful. does this realtor have a legal interest, other than a realton's contract to sell, in the value of the property? if not, how is she claiming loss of value on something in which she has no interest? these future revenues- are we talking rental/lease properties here, repeat sales from a business on the lots, or what? that can be a tricky one, and from your post could conceivably include anything from loss of rents to loss of sales and loss of name recognition. it might be helpful to know more information about the sources of these revenues. as far as loss of revenue from lost sales of the lots themselves, you might try starting off by documenting a reasonable figure as to whatever costs that the realtor has in it and subtract out some negotiated amount as to what the lots would reasonably sell for "as-is"- assuming that the negotiated value is less than what she's got it it. if it's more than what she's got it in, i'm not sure she would have a loss on anything other than expected profits. you might to take the tack that you only owe for what she's got in it, and not the profit (which may be speculative) that she may (or may not) have made from any sale. if necessary, i might use some reasonable profit margin as a bargaining chip if she has documented profits from similar past sales or can document reasonable expectations of future profits. lastly, who is "all"? is "all"'s opinion valid or have you obtained your own independant appraisal or info? just my take, for whatever it's worth...
Tomj (Tomj)
Posted on Saturday, September 09, 2000 - 3:11 pm:   

Agree with you all, Tom what was the "LOSS", if
we have a third party liability situation recource may be through the courts.
Chuck Deaton
Posted on Saturday, September 09, 2000 - 12:16 pm:   

Tom, Loss of Income and Business Interruption coverages are first party coverages. Only in special circumstances is land or the products of land insurable.

If I understand your post, the situation at hand involves third party liability.

Damages are a part of a third party liability claim and can include any damage suffered by the claimant/plaintiff. While most clear liability situations are settled, it remains the injured party's responsibility to prove those damages.

All third party liability situations are adversarial. Settlements are reached by offer and counter offer and should negotiation fail, sometimes by decision of a court.

Should you wish to kick this around, e-mail me a contact number and I will call you.
Eqkid (Eqkid)
Posted on Saturday, September 09, 2000 - 2:22 am:   

note: Land is excluded from coverage..

Check the CP 1010 and CP 1030 policies. What is the covered peril.. What is the loss to the realtor... She is listing the property that only means that is up for sale and she is paid contingent on a sale and buyer... There is no proof that she has either..

Liability is not clean neither is her loss...
Maybe she would have sold the lots and maybe she would not... there is no proof of loss.

Rick Holt
Staff Adjuster
Former Cat Adjuster.
Jim (Jim)
Posted on Saturday, September 09, 2000 - 12:25 am:   

"Business Interruption" only applies to property losses under the commercial policy forms with one of the business interruption endorsements.

Damages in liability claims may cover a loss of business potentially, but not under the same provisions as "business income" as described in a commercial property policy with the business income endorsement.

While you don't say it, it would seem that perhaps you are suggesting an environmental loss or contamination situation?

Remember, a tort (negligence) is a civil wrong which occurs when there is a duty owed, a duty breached, proximate causation, and resulting damages. Without all of these four elements present, there is no negligence, amd hence no relief and recovery.
Posted on Friday, September 08, 2000 - 7:43 pm:   

Questions? A real estate Broker (forget the peril) liability situation. has several lots for sale. Now due to the peril, she is claiming loss of 1.) value 2.)loss of revenue from not being able to sale lots 3.) and future loss of revenues.
Yes, liability is clear. Smaller previous deals as above as far as history of income goes.
Please someone discuss the issues of what is owed and how to go about the calculations of payments if any. The lots are not damaged, but based on peril, "all" feel that land and lots are de-valued .
Lets hear from the B.I. people.

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